The Russian Ministry of Economy considered allowing Bitcoin (BTC) mining in regions of that country where there is a constant surplus of electrical energy, as a sign of the acceptance of the Vladimir Putin government to the activity that keeps the cryptocurrency protocol secure. original.
In statements to the local media IzvestiaMinistry spokesmen indicated that these proposed measures will help, they say, to stop “shadow mining” and, at the same time, introduce the cryptocurrency ecosystem in the legal field of the Eurasian country, although that limits the production of digital currencies.
According to press information, the regulatory proposal received the support of the Ministry of Energybut, in turn, found rejection by the Central Bank of Russia, which a few days ago ruled against Bitcoin.
In addition to the proposal to mine in regions with energy to spare, launched the initiative to introduce reduced commercial rates for electricity consumption for this activity.
According to the Ministry, mining “should be recognized as a commercial activity” and therefore “taxes should be introduced on the fact of converting cryptocurrencies into rubles, following the example of Japan and Germany.”
Even so, they defend that the government should offer “acceptable prices” for Bitcoin miners, since that would “eliminate the risks of insufficient energy supply to homes, social facilities and industries in other territories.”
To get that, the Ministry proposes low tariffs to connect mining farms and other data processing centers to energy sources. They seek that prices do not depend on the place of production, “even if it is located in generation facilities.”
In this way, both the connection of the mining devices to electricity, as well as the cost of kilowatt hours (KW/h) will be economical, according to the Russian Ministry of Economy.
It also wants to introduce a cost for the use of electricity for private miners. Although it has not been determined, They explain that they must fully cover the needs of a home.
“If consumers start mining, their spending will go up. This will become an indicator for the establishment of a higher rate, in terms of industries,” the Ministry spokesman told the local newspaper.
Central Bank on the defensive again
Izvestia spoke with representatives of the Russian monetary entity to get their impressions on the proposals of the Ministry of Economy. For the institution, it is negative because if an “unproductive demand” for electricity is created, “mining will limit production in the country and endanger the supply of residential facilities and businesses.”
“Such activities will not bring benefits to the economy. Furthermore, cryptocurrency mining is contrary to the goals of achieving carbon neutrality. The competitiveness of mining in Russia is not associated with the development of advanced technologies, but with cheap electricity, while software and hardware are imported.
Central Bank of Russia.
The words of the institution are added to what they expressed last January 20, when, in a report, they proposed to make mining of Bitcoin and other cryptocurrencies illegal, alleging that these assets pose alleged threats to the “well-being of Russian citizens” and the stability of the Russian financial system.
Volatility and its use in criminal operations (which is usually done mainly with fiat money) are part of the alleged threats that the Bank sees in Bitcoin and the rest of the ecosystem. This institution described cryptocurrencies as a “financial bubble” and as a market determined by “speculative demand”, as reported by CriptoNoticias.
Shortly after, the Central Bank of Hungary validated these statements, as reported in this medium. They cited the same reasons as their Russian counterpart, but extrapolating the ban request throughout the territory of the European Union.
It was no use
The truth is that the request of the Russian Bank did not help, because days later, President Vladimir Putin himself was open to Bitcoin mining, charging against that institution.
“The Central Bank does not stand in our way of technical progress and is making the necessary efforts to introduce the latest technologies in this area of activity,” Putin said, according to CriptoNoticias.
That ruined the proposals and recommendations of the centralized Russian bank. At that time, Putin asked the ministers to continue the discussion on that issue and reach a unanimous decision.
That’s how it went. On February 9, this newspaper reported that Russia was already preparing a bill on the circulation of cryptocurrencies, which implied a radical change for the use of these assets, which would be legalized and regulated.
Although the plan, apparently, does not show any change regarding Bitcoin mining, it is planned to give explicit recognition to cryptocurrencies as currencies and not financial assets, so they will have to be governed by the laws of that country. that apply directly to fiat money.
It is estimated that this February 18 the legislation will come out and, with it, determine the new direction that the Bitcoin ecosystem will take in that country, where almost 12% of its population is already user of cryptocurrencies.
Russia, the new mining destination
What the Ministry of Economy proposes, added to what Putin said, means that this country, whose controls are absolute, gradually become a new destination for Bitcoin miners.
It is known that, after the political crisis in Kazakhstan, that Central Asian country, which once held 18% of the world’s Bitcoin hashrate, became hostile against the activity, through regulations, cuts and tariff taxes that complicated the development of the industry.
Thus, the bitcoin producers who left China since the middle of last year, when that country advanced fiercely against the miners, increasingly decentralize the activity, moving towards other borders. and locating a place where they can fully dedicate themselves to mining cryptocurrencies.