President Vladimir Putin backs bitcoin mining
Image Source: Bitcoin Magazine

Putin backs Bitcoin mining and opposes crypto ban proposals

President Vladimir Putin backs bitcoin mining, noting the country’s competitive advantages, thereby opposing the Central Bank’s recent proposal to restrict crypto mining in response to pressure from Russia’s Federal Security Service.

President Vladimir Putin backs bitcoin mining

President Vladimir Putin backs bitcoin mining
Image Source: Bitcoin Magazine

For a long time, Russia’s Central Bank has toyed with the idea of cracking down on cryptocurrencies. The corporation has recently proposed a ban on the purchase, sale, and mining of digital assets such as Bitcoin.

The bank released a study for public comment, warning about purported financial pyramids and potential crypto market booms. The idea allegedly raised worries about threats to financial stability, citizens’ well-being, and the bank’s monetary policy sovereignty, according to Reuters.

“The potential financial stability concerns connected with cryptocurrencies are substantially bigger in emerging markets, such as Russia(…)” This is attributable to a historically larger proclivity for saving in foreign currency and a lack of financial awareness, according to the report.

The bank will accept recommendations and opinions on the crackdown until March 1, according to the bank, which will be considered in the final decision that will be enacted into law. According to the bank, active Russian cryptocurrency users transact roughly $5 billion each year.

“The global cryptocurrency market sees a substantial amount of engagement from Russian citizens. The risks to financial stability connected with this are currently low; however, if citizens become more involved in the bitcoin market, the hazards will considerably increase.

The Russian Ministry of Finance and leading political figures have criticized the bank’s hostile approach, claiming that a ban would harm the country’s high-tech development.

They do agree on the need for a clear regulatory framework, and many of them believe crypto miners should be charged different energy prices than the rest of the population.

However, Dmitry Kirillov, a national legal firm Lidings adviser, told a local media that “at this moment, the Central Bank report looks like a declaration of purpose,” and that “practise will indicate what particular regulatory changes it will result in.” “I genuinely hope that market participants will be able to persuade the regulator that cryptocurrencies may also serve governmental objectives,” he added.

According to data from Cambridge University, Russia accounts for 11.23 percent of all bitcoin mining hash rates in the globe, making it the third-largest crypto-miner country. As a result, a crackdown would have a temporary impact on the business.

The positions that encourage bitcoin activity are relevant for the plummeting crypto market as the discussion heats up. During a video conference, President Vladimir Putin stated that Russia has competitive advantages “particularly in the sector of [crypto] mining,” citing the country’s “well-trained staff” and electricity excess.

The Russian president took an open stance toward the industry, requesting that the Russian government and the Central Bank “come to some sort of united judgment and report on the achievements that will be achieved.”

“The Central Bank has its own perspective, which is linked to the fact that, according to Central Bank specialists, the expansion of this type of activity poses significant risks, mainly for the country’s inhabitants,”

While Putin acknowledges that cryptocurrencies pose some hazards to consumers, he also urged government agencies to consider the benefits the ecosystem provides to the country. The basic strategy of Russia’s senior leaders appears to be regulations rather than bans.

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