Russian President Vladimir Putin said on Wednesday the country has distinctive features that allow it to benefit from bitcoin mining, while his central bank last week called for a total ban on activities in the country amid concerns that cryptocurrencies pose risks to its citizens could represent.
Putin also called on the Bank of Russia to reach a consensus with the country’s finance ministry, which on Tuesday advised against a total ban on bitcoin trading and mining in the country, citing how such a move could hurt Russia’s competitiveness in the tech sector .
“The central bank does not stand in the way of our technological progress and is making the necessary efforts to use the latest technology in this area,” Putin said at a meeting with members of the Russian government on Wednesday, addressing the differing opinions of the government agency and the central bank .
The central bank’s position on cryptocurrencies is based on concerns that “given the high volatility and some other components of this issue, the expansion of this type of activity poses certain risks, and most importantly for the country’s citizens,” Putin said.
“Although of course we also have certain competitive advantages here, particularly in so-called mining,” Putin added, citing the country’s “excess power” and “well-trained workforce” that could be harnessed for a thriving bitcoin mining industry there.
Russia rose to third place in the list of countries with the highest share of hashrate on the Bitcoin network last year after China banned the asset and the underlying mining industry over the summer. An exodus of bitcoin miners from Chinese soil led to the establishment of mining farms in the US, Kazakhstan and Russia. The eastern European country’s cheap energy and freezing climate make it attractive to miners as it allows for higher profit margins and higher hashrate.