Vladimir Putin wants Bitcoin miners to stay away from Russia

Russian President Vladimir Putin has had enough of the unregulated Bitcoin mining in Russia. He’s worried that this surge in mining activities could cause serious power outages.

Alongside BRICS, Putin is calling for stricter regulations to keep Russia’s power grids safe from these energy-guzzling operations. He said:

“An uncontrolled increase in electricity consumption for mining cryptocurrencies can lead to power shortages in certain regions.” 

According to Russia’s Energy Ministry, crypto mining consumes about 16 billion kilowatt-hours each year. That’s almost 1.5% of the country’s total electricity use. And guess what? This number is only going up.

The power used for mining could cause major shortages, especially in places like Irkutsk, Buryatia, and Zabaikalsky Krai. These regions are already struggling. Putin warned that:

“If there is no free capacity, if it is ‘chosen’ by the so-called mining farms, then new enterprises, residential areas, social facilities will face supply interruptions, a shortage of electricity.”

Russia’s low electricity prices make it a magnet for miners. They bring in their mobile mining gear and set up shop, using a ton of power.

Putin has already ordered regulations for Bitcoin mining. This includes figuring out taxes for these operations and setting tariff rules. The goal is to control the power consumption and prevent the grid from being overloaded. Putin said: 

“We have already made serious progress in this area, and my colleagues will, I hope, report on current results and future plans today.”

He also brought up the Central Bank’s pilot project from last year, which tested the CBDC digital ruble. This project involved 12 banks, 600 people, and 22 businesses across 11 cities.

By July 1, they had made over 27,000 transfers and 7,000 payments. The digital ruble platform worked well, and now Putin wants to roll it out on a bigger scale.

Putin ended his speech saying Russia needs to act fast. Without proper regulations, the country’s power grid could face serious problems. He’s calling for systemic decisions at the federal law level to tackle this issue directly.

Putin stressed, “Here it is necessary to make the right and timely decisions, including systemic ones, at the level of federal law.”