Vladimir Putin, President of Russia, spoke about Bitcoin mining on Wednesday (17th), declaring that this activity poses a threat to the Russian population due to its high electricity consumption. Struggling with American and European sanctions, Russia is seeking ways to circumvent these restrictions. Earlier this month, for instance, the Russian Central Bank recommended that businesses use cryptocurrencies in international trade.
However, the country is also wary of the potential widespread use of cryptocurrencies within its borders, which could weaken its currency, the ruble. In light of this, the Central Bank released a lengthy document last week stating that stablecoins are banned in local commerce.
### Vladimir Putin Criticizes Bitcoin Mining
Bitcoin mining is a contentious topic. Critics argue that this activity drives up electricity prices for other businesses and citizens due to increased demand. On the other hand, some proponents believe that the sector boosts the growth of the power grid, benefiting everyone.
Putin is among the critics. During a videoconference on Wednesday (17th), the Russian president expressed concern over the energy consumption of mining companies. "Cryptocurrencies can be mined almost anywhere on the planet, but mining requires a lot of electricity," Putin said. "According to the Ministry of Energy, Russia spends 16 billion kWh annually on this, which is nearly 1.5% of the country's total electricity consumption."
"This number continues to grow. The growth factors are understandable, such as relatively low electricity prices and the mobility of cryptocurrency mining equipment. However, what should concern us is the uncontrolled increase in electricity consumption for crypto mining, which could lead to power outages in certain regions."
According to Putin, this issue is already noticeable in regions like Irkutsk, Buryatia, and Transbaikalia, which collectively have about 2.7 million inhabitants. Describing this issue as "quite acute and fraught with serious consequences" for Russians, the president stressed that "correct and timely decisions must be made," promising higher taxes on the sector.
### Russian President Criticizes Cryptocurrencies
Even though Russia encourages its businesses to use cryptocurrencies to bypass sanctions, Vladimir Putin criticized them, specifically highlighting this point. "Another issue concerns cryptocurrencies. They are not monetary units in the usual sense but are increasingly used worldwide as a means of payment in international transfers."
Ultimately, the country finds itself lacking many options. After all, by encouraging the use of cryptocurrencies in international trade, these currencies will enter and circulate more easily within the country. On the other hand, it appears to be the best alternative.
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