Putin pumps the brakes on Russian Central Bank's push to ban crypto, sees future in mining

Russian President Vladimir Putin is not totally on board with the Central Bank of Russia's recent call to ban cryptocurrency in the country. 

In a January 26 video conference, Putin asked officials in his government to hold talks, including the central bank, on the subject of cryptocurrencies. While he acknowledged "certain risks, first and foremost to citizens of the country, given significant volatility," he directed his agencies not to neglect the advantages that Russia has in the area.

"We also have here certain competitive advantages, especially in so-called crypto-mining. I mean surplus in electricity and well-trained teams present in the country," said Putin.

Last week, the Central Bank of Russia revealed its proposal to fully ban crypto transactions and mining in Russia, which some reports linked to pressure from the Federal Security Service. Interestingly, Putin did not mention recent clampdowns on Russian ransomware gangs in his remarks. 

The proposed ban drew criticism from several leading figures in the Russian political opposition and also sent global crypto markets tumbling. 

Russia, after the US and Kazakhstan, has become the third-largest source of Bitcoin's hash rate in the world over the past year, as miners left China amid a similar blanket ban. Given that neighboring Kazakhstan has been rocked by energy shortages, instability and government shutdowns of internet, the fate of the hash rate in the region remains an open question.

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About Author

Kollen Post is a senior reporter at The Block, covering all things policy and geopolitics from Washington, DC. That includes legislation and regulation, securities law and money laundering, cyber warfare, corruption, CBDCs, and blockchain’s role in the developing world. He speaks Russian and Arabic. You can send him leads at [email protected]