Russia: Vladimir Putin Says Stop to Bitcoin Mining!

Russian President Vladimir Putin recently expressed concerns about the unregulated increase in Bitcoin mining activities in Russia. During a meeting with senior government officials, Putin warned that this rise could lead to widespread power outages in some regions of the country.

Bitcoin Mining: An Energy-Intensive Activity?

Bitcoin mining is an extremely energy-intensive activity. It consumes an average of 16 billion kilowatt-hours per year in Russia, which is about 1.5% of the country’s total electricity consumption. This consumption continues to increase due to the relatively low cost of electricity in Russia and the easy access to mining equipment.

Despite restrictive laws on cryptocurrencies, Russia became the second-largest crypto mining country after the United States in 2023. However, this rapid growth has raised concerns among regional authorities. In particular, in the North Caucasus republic of Dagestan, which has faced long power outages largely due to an aging infrastructure.

Putin pointed out that the uncontrolled increase in electricity consumption for Bitcoin mining could lead to electricity shortages in some regions, leaving new businesses, residential areas, and social facilities without supply. He also mentioned that this could delay promising investment and infrastructure projects.

Putin’s Offensive!

To address this situation, Putin ordered the implementation of fiscal and tariff regulations to curb miners and called for strict federal law to address this issue.

Putin’s recent decision to regulate Bitcoin mining comes as Russia was forced to introduce electricity cuts in several regions due to an issue at the Rostov nuclear power plant. This situation highlights the energy challenges the country faces and the importance of timely systematic decisions to regulate this activity.

Putin’s position on Bitcoin mining reflects a growing concern for Russia’s energy stability. But also the need to regulate a rapidly expanding industry to avoid major disruptions in the country’s electricity supply.