Crypto-currencies are in the sights of the Russian central bank. But the country’s president, Vladimir Putin, seems rather favorable to their continuation.
The statement has made waves in the crypto sphere. In mid-January, Russia’s central bank called for a ban on crypto-currencies in the country. Judging that digital assets such as bitcoin pose a threat to the country’s financial stability and to the population, it called for a ban on transactions as well as the mining of crypto-currencies. Vladimir Putin, however, unveiled a very different position on the subject on January 26, during a video conference with his ministers, notes the Decrypt media.
The Russian president admits that crypto-currencies can pose “certain risks, primarily for the country’s citizens, given their high volatility,” but he believes they also have potential that Russia should not overlook. “We also have several competitive advantages in this area, especially in crypto-currency mining: surplus electricity and specialized teams in the country.”
Vladimir Putin is not hostile to cryptos
So Vladimir Putin does not seem to be particularly in favor of banning crypto transactions and mining in Russia, as the country’s central bank advocates. According to Bloomberg, he would rather favor taxation and stronger regulation of mining activities. These statements should delight crypto enthusiasts such as bitcoin, as Russia has become an important hub for mining: the 3rd largest in the world behind the US and Kazakhstan.
The hostility of the Russian central bank had thus created uncertainty on the crypto market, even if the main reason for the falls that we observe there at the moment is the fact that the central banks of several countries, notably the FED, plan to increase interest rates soon. When borrowing money is more expensive, investors tend to stay away from riskier bets, such as cryptos.
China banned bitcoin mining
In June 2021, China banned crypto mining on its soil. The decision had had a huge impact, especially on bitcoin, as the country was home to between 65 and 75 percent of bitcoin mining at the time. The most valued crypto, however, had weathered the shock well. The proof-of-work protocol on which the bitcoin blockchain is based had worked as expected: when the number of miners dropped, the difficulty of the equations to be solved to mine a block was adjusted proportionally downwards.