Vladimir Putin in favor of bitcoin mining but with regulation

Russian President Vladimir Putin is looking forward to “tax and regulate” cryptocurrency mining rather than putting a blanket ban on the practice.

According to reports, Putin is seeking a proposal to restrict crypto mining to regions in the country with excess electricity supply. The plan will also involve levying taxes on approved cryptocurrency mining establishments in the country.

Russia’s Advantages In Crypto Mining

Putin’s remarks come shortly after Russia’s central bank called in favor of a blanket ban on cryptocurrencies even as the Ministry of Finance argued in favor of regulating the digital money sector instead. The Russian President has ordered the central bank and the ministry to reach a consensus to regulate crypto-related activities.

President Putin was quoted saying that Russia has “advantages” in crypto mining. In a government meeting held on Wednesday, Putin referenced the country’s surplus in electricity production, which can be leveraged to support crypto mining. Putin commented,

“We also have certain competitive advantages here, especially in the so-called mining. I mean the surplus of electricity and well-trained personnel available in the country.”

As per the report, Putin’s proposal may permit crypto mining operations to take place in energy-rich regions of Russia such as Irkutsk, Krasnoyarsk, and Karelia. However, neither the government nor the central bank has issued an official notice in this regard. BitCluster co-founder, Vitaliy Borschenko, has recently claimed that the Russian government has invited cryptocurrency miners to join a working group after the central bank published its report and that “most ministries and agencies are against radical measures.” Putin’s backing may advance regulations that will legitimize the crypto mining industry in Russia. It can also strengthen the country’s global position in the mining sector, presently led by the United States.

Crypto Related Regulation Across The Globe

Regulating the crypto market and cryptocurrency mining has been a hot debate across the world in recent years. In early 2021, China banned crypto-mining from all of its provinces which prompted miners to shift base to the Republic of Kazakhstan. The move made Kazakhstan the world’s second-largest center for bitcoin mining last year, ranking only after the United States. In hindsight, the situation may have changed over the last week, after its government temporarily banned mining amidst an ongoing energy crisis.

Currently, in terms of Bitcoin mining, Russia is the third-largest country based on its share of the Bitcoin hash rate, a unit of computational power on the network. The US holds the leading share of the Bitcoin hash rate globally.