Russia will surpass Kazakhstan to become the second largest cryptocurrency mining country in the world in 2023. Kommersant Report on April 12th.
According to Bitriver, Russia’s largest Bitcoin mining provider, Russia’s coin mining capacity reached 1 GW from January to March this year, second only to the United States, which has 3 to 4 GW of capacity.
Cut off from the international payment system after SWIFT sanctions were imposed shortly after the start of the war a year ago, Russia is accelerating its plans for a digital currency that operates outside the control of international regulators. The Central Bank of Russia (CBR) has already launched a pilot program to test the use of the state-backed digital ruble.
Bitcoin and other cryptocurrencies are already widely used by the population to circumvent restrictions on remittances to the EU. Also, Russian companies are investing in the development of new cryptocurrencies.
Russia has made great strides in the cryptocurrency mining industry in recent years. In contrast, Kazakhstan has seen her 2022 cryptocurrency mining activity restricted, slipping to her ninth spot due to power sector spills and unauthorized activity.
As reported by bne IntelliNewsKazakhstan Financial Supervisory Authority (FMA) Shut down ABS changea cryptocurrency trading platform that had been operating illegally without a license since 2021. Additionally, ABS Change held $23,000 worth of crypto assets in two temporarily restricted Binance wallets.
Following China’s move to ban the crypto industry, Kazakhstan, which has attracted many crypto miners with its cheap electricity, has taken steps to regulate the sector, including a law limiting access to low-cost electricity for mining farms. We took steps and introduced licenses to miners. Kazakhstan has suffered multiple blackouts in 2021-2022 due to a surge in cryptocurrency mining operations.
Residents of Ekibastuz, in the Pavlodar region of northeastern Kazakhstan, were left without heating on a cold day this winter until authorities shut down operations after cryptocurrency miners ran out of power at the local power company. I was.
China has implemented a similar crackdown since 2021 and did not even make the top 10 list on Bitriver. China will ban cryptocurrency mining in 2021.
However, in Russia, restrictive cryptocurrency legislation, including President Vladimir Putin’s 2020 Law on Digital Financial Assets, restricts the use of bitcoin. , prohibited its use to pay for goods and services. The CBR compromise proposes a regulated digital ruble that is not a true cryptocurrency, as regulators can play a role in controlling the coin supply and controlling the central bank’s traditional money supply. was.
After initially rejecting the idea of a cryptocurrency, the famously conservative Central Bank of Russia (CBR) recently Softens stance on possible use of cryptocurrencies As a recognized payment instrument. CBR deputy director Xenia Yudaeva took a more relaxed stance on crypto mining last June, saying regulators were toying with the idea of allowing the use of cryptocurrencies for international payments.
“We have changed our position on mining. [could] We will allow foreign trade and the use of cryptocurrencies outside the country,” Judaeva said in June 2022.
However, Judaeva reiterated the regulator’s position that cryptocurrencies are highly speculative vehicles and are in fact Ponzi schemes. She warned that legalizing cryptocurrencies in Russia could lead to more illegal activities and tax evasion.
Seeking a solution to circumvent sanctions restrictions, Russian Prime Minister Mikhail Mishustin has added his name to his roster Russian officials favor using digital money to settle international trade transactions in September.
The U.S. recognizes that unregulated and decentralized cryptocurrencies are a threat to the effects of SWIFT sanctions on Russia’s ability to make international payments, and has already begun attempting to close the loophole. The U.S. already blacklisted Bitcoin and Ether addresses in February, accusing it of being involved in the overseas sale of Russian defense equipment, and the role various cryptocurrency exchanges have played in overcoming sanctions. is investigating.
Binance, one of the largest cryptocurrency exchange platforms, announced Last April, following the EU’s fifth package of sanctions, theService must be restricted to Russian citizens or natural persons residing in Russia, or legal entities incorporated in Russia, who hold crypto assets valued at more than €10,000.”. Another exchange, Coinbase, has also warned Russian users that their accounts will be blocked on May 31.
In addition, the European Union, as part of the eighth round of sanctions introduced last summer, has banned all cryptocurrency transactions with Russian citizens and anyone residing in the country.US Treasury Department also targeted Switzerland-based Russian cryptocurrency mining to own BitRiver in September.
However, with the Ministry of Industry of Russia Central Bank of Iran Last August, they agreed that, in theory, they could use cryptocurrencies to process imports.
Iran is another cryptocurrency hotspot, accounting for 4.5% of global coin mining. According to research It was built last year because electricity is cheap.
If that happens, Russia’s use of cryptocurrencies to settle international trade agreements won’t happen anytime soon. It warned that cryptocurrencies will not help Russia evade sanctions because Moody’s believes that the low liquidity of the ruble-bitcoin pair at around $200,000 means that cryptocurrencies will likely be the means to cover her $46 billion in daily transactions with Russian financial institutions in the near future. I don’t think so.
