The tables have turned in Russia as the country’s energy minister calls for the legalization of crypto mining.
Russia has had to fend for itself in recent months as it has faced escalating sanctions from the West and other nations.
On Saturday, Deputy Energy Minister Evgeny Grabchak stated that Russia’s mining sector is now operating in a “legal vacuum” that must be addressed immediately.
Turning To Crypto For Help?
According to Grabchak, Russia has to lift the curtain surrounding laws and exploit crypto mining to its benefit, adding that the government should select where they want miners clustered for maximum output in a display of good faith.
Grabchak’s remarks came in the aftermath of some of the most severe economic sanctions ever imposed on Russia in response to its invasion of Ukraine. Russia is effectively cut off from the western banking system as a result of the sanctions.
The official said:
“This legal void must be filled immediately. If we are to coexist with this activity, and we now lack other options, we must enact legal legislation, incorporating the notion of mining into the regulatory system.”
Russia, which has abundant energy resources, has long been considered a possible location for Bitcoin mining as a means of coping with ever-tougher sanctions imposed on the country.
BTC total market cap at $899.54 billion on the daily chart | Source: TradingView.com
Alternative Source Of Revenue
Grabchak emphasized that it would be more efficient to decide mining areas and allocate energy resources to miners at the regional level than the federal level, and that this should be guided by regional development plans.
He stressed the importance of capping energy use in regional development plans, which will result in a more efficient market.
Recently, Russian State Duma member and Energy Committee Chairman Pavel Zavalny proposed Bitcoin and national currencies as alternative payment methods for energy exports to “friendly countries.”
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Choking Russia’s Economy
The US and its partners have taken steps to ensure that the Russian government cannot conduct financial transactions in the crypto field. While the majority of large cryptocurrency exchanges operate in Russia, they have been forced to comply with blacklists targeting certain Russian organizations.
Meanwhile, Russia has seen a dramatic growth in cryptocurrency usage this year, with a government report earlier revealing that Russians possessed almost 12% of the world’s total cryptocurrency, or roughly $240 billion.
The country’s plentiful energy supply, combined with its frigid environment, makes it a suitable mining option. Before the Ukraine war broke out, crypto advocates predicted that Russia will be the next major mining hub, following crackdowns in mining regions China and Kazakhstan.
Featured image from Coingape, chart from TradingView.com