Russian President Vladimir Putin recently expressed concerns about the impact of crypto mining on the country’s power supply. He highlighted the uncontrolled electricity consumption by Bitcoin and other crypto mining facilities, leading to power shortages in regions such as the Irkutsk region, Buryatia, and Trans-Baikal Territory. This issue, according to Putin, could have serious consequences for enterprises, residential areas, and social facilities, potentially disrupting investment and infrastructure projects.
Putin revealed that crypto mining in Russia currently consumes 16 billion kilowatt-hours annually, accounting for 1.5% of the country’s total electrical consumption. This figure is expected to rise due to Russia’s low electricity prices and the ease of moving mining equipment. To address this issue, Putin discussed the need for federal mining legislation, including measures related to taxation and tariffs.
In response to the growing concerns, Russian lawmakers are considering draft legislation that would restrict large crypto-mining operations to approved companies. Additionally, the government may have the authority to ban mining activities in regions facing energy shortages. Recent developments indicate that the State Duma Committee on the Financial Market approved a draft bill to decriminalize crypto mining in Russia while prohibiting the circulation of cryptocurrencies.
The Digital Rouble Initiative
Alongside the discussions on crypto mining, Putin emphasized the importance of expanding Russia’s central bank digital currency (CBDC), known as the digital rouble. He emphasized the need for a wider, full-scale implementation of the digital rouble, citing the success of the pilot program launched in August 2023. The pilot program has facilitated over 27,000 transfers and 7,000 payments for goods and services, demonstrating the digital rouble’s performance and functionality.
As Russia grapples with the escalating electricity consumption from crypto mining activities, the government is taking steps to address the potential power shortages and regulatory challenges. The push for a digital rouble represents a strategic move towards embracing innovative financial technologies and enhancing the country’s digital economy. By implementing targeted regulations and promoting the use of CBDCs, Russia aims to navigate the complex landscape of crypto mining while tapping into the benefits of digital currencies for its economy.
