Putin Warns of Crypto Mining

Putin warns that uncontrolled crypto mining in Russia may cause regional electricity shortages. Urges rapid integration of digital ruble.

Russian President Vladimir Putin has raised concerns over the growing trend of cryptocurrency mining in the country, warning that the uncontrolled increase in electricity consumption for mining activities could lead to electricity shortages in certain regions.

During a meeting with government officials in Moscow to discuss various economic issues, Putin pointed out the rapid advancements in digital technologies. “In order for Russia not to miss these developments, it is important to develop the legal framework, infrastructure, and conditions necessary for the circulation of digital assets both domestically and with our partners abroad,” he stated.

Putin noted that the Central Bank of Russia began testing the digital ruble in August 2023. “This is essentially another form of our national currency. Its peculiarity is that citizens and businesses can use the digital ruble regardless of which bank they have an account in,” he explained.

Emphasizing the need to popularize the digital ruble, Putin instructed officials to accelerate efforts to integrate its use, particularly in financial and economic activities.

Rising Popularity of Crypto Mining

Putin observed that cryptocurrencies are increasingly in demand in global trade. “In contrast, mining of digital currencies can be done almost anywhere in the world. But it requires a lot of electricity,” he said.

He revealed that cryptocurrency mining consumes 16 billion kilowatt-hours of electricity annually in Russia, accounting for almost 1.5% of the country’s total electricity consumption. “This figure continues to grow,” he added.

Putin pointed out that the rising demand for crypto mining is influenced by favorable electricity prices in Russia, but he warned, “The uncontrolled increase in electricity consumption from cryptocurrency mining may lead to an electricity shortage in certain regions.”

He stressed that such a deficit could impact other investment and infrastructure projects, calling for systematic measures to address the issue.

The use of cryptocurrencies has become widespread in Russia in recent years, partly due to sanctions imposed by Western countries on the banking sector.