Russian energy minister has stated that the regulatory uncertainties surrounding crypto mining in Russia need to be resolved as soon as possible.
Evgeny Grabchak, the Deputy Minister of Energy, has urged the government to legalize space, citing the country’s severe economic situation.
Grabchak’s comments follow the imposition of some of the strictest economic sanctions against Russia in relation to its invasion of Ukraine. Russia is effectively cut off from the western banking system as a result of the sanctions.
This legal vacuum needs to be [eliminated] as soon as possible. If we want somehow to get along with this activity, and we have no other options in the current reality, we must introduce legal regulation, adding the concept of mining to the regulatory framework.
Deputy Minister of Energy Evgeny Grabchak to Russian state news agency TASS
Given that deciding on mining sites and granting energy allowances to miners would need to correspond with regional development plans, Grabchak believes it would be more efficient to regulate mining at the state and regional levels rather than at the federal level.
Will Russia adopt cryptocurrency?
There has been much speculation about whether Russia may utilize cryptocurrency to bypass recent economic sanctions. Despite the fact that experts have dismissed the idea of Moscow using crypto to enable large-scale transactions, the idea has persisted.
A Russian minister recently suggested that the government may accept Bitcoin as payment for its enormous energy exports (BTC). Due to the ruble’s high volatility, Russian citizens have turned to cryptocurrency to preserve their assets, although the country’s payment service operations have been suspended, making this trend difficult to maintain.
The US and its allies have also taken measures to prevent the Russian government from moving money through space. Most major crypto exchanges, while operating in Russia, have been forced to comply with blacklists targeting certain Russian organizations.
Cryptocurrency regulation in Russia is in flux.
Cryptocurrencies are currently regulated to a minimal extent in Russia, although they remain a highly divisive topic among government agencies. In contrast to certain initiatives by the finance ministry to legalize the space, the Russian central bank has called for a blanket ban.
The finance ministry submitted a bill last month defining a regulatory framework for cryptocurrency trading and mining in Russia. The country has experienced a drastic increase in crypto adoption this year, with a government report earlier this year showing that Russians held nearly 12% of the world’s total crypto, or $240 billion.
The country’s abundant energy supply, combined with its cold environment, makes it a suitable mining destination. Following crackdowns in mining hotspots China and Kazakhstan, crypto enthusiasts had tagged Russia as the next mining hotspot prior to the Ukraine conflict.