The tables have turned in Russia as the country’s energy minister is calling for crypto mining legalization.
Russia has had to fend for itself in recent months as it has faced escalating sanctions from the West and other countries.
On Saturday, Deputy Energy Minister Evgeny Grabchak stated that Russia’s mining sector now operates in a “legal vacuum” that must be addressed immediately.
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Turning to Crypto for Help?
According to Grabchak, Russia should lift the curtain on laws and exploit crypto mining to its advantage, adding that the government should select where to cluster miners for maximum output in a show of good faith.
Grabchak’s comments came in the wake of some of the toughest economic sanctions ever imposed on Russia in response to the invasion of Ukraine. Russia is effectively cut off from the Western banking system as a result of the sanctions.
The official said:
“This legal gap must be filled immediately. If we want to coexist with this activity, and we have no other options now, we must pass legal legislation, incorporating the concept of mining into the regulatory system.”
Russia, which has abundant energy resources, has long been considered a possible location for Bitcoin mining as a way to cope with the increasingly tough sanctions being imposed on the country.
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Alternative source of income
Grabchak stressed that it would be more efficient to define mining areas and allocate energy resources to miners at the regional level than at the federal level, and that this should be guided by regional development plans.
He stressed the importance of capping energy consumption in regional development plans, which will lead to a more efficient market.
Recently, Pavel Zavalny, member of the Russian State Duma and chairman of the Energy Committee, proposed Bitcoin and national currencies as alternative payment methods for energy exports to “friendly countries”.
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Suffocating the Russian economy
The US and its partners have taken steps to ensure that the Russian government cannot conduct crypto financial transactions. While most major cryptocurrency exchanges operate in Russia, they have been forced to comply with blacklists targeting certain Russian organizations.
Meanwhile, Russia has seen dramatic growth in cryptocurrency use this year, with a government report previously revealing that Russians owned nearly 12% of the world’s total cryptocurrency, or about $240 billion.
The country’s abundant energy supply, combined with its frigid environment, makes it a suitable mining option. Before the war in Ukraine broke out, crypto advocates predicted that Russia will be the next major mining hub, following crackdowns in the mining regions of China and Kazakhstan.
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