Russian President Vladimir Putin reportedly backs a government proposal to encourage bitcoin mining in the country through clear taxation and regulatory measures, instead of following the central bank’s recommendations of banning the activity altogether.
According to a report by Bloomberg, the Russian government is mostly against radical measures and instead seeks to promote a healthy bitcoin mining industry by presenting a new set of legislation intended to tax and regulate farms that have flocked to the country in the past year.
Three people familiar with the matter told Bloomberg that Putin backs the government’s stance, while the Bank of Russia has recommended the country to prohibit citizens from trading and mining cryptocurrency due to concerns that the activity could pose certain risks.
“The president’s backing, combined with his public comments this week, mean that the proposals are likely to be approved,” per the Bloomberg report.
Putin on a Wednesday meeting with government officials acknowledged the central bank’s position but highlighted that Russia had some “competitive advantages” to mining bitcoin, given its “power surplus and well-trained manpower,” according to a translated version of a statement from the Kremlin. The President also asked the government and central bank to come to a consensus regarding cryptocurrency.
Russia’s Ministry of Finance on Tuesday discouraged the country from pursuing a complete ban on cryptocurrency as suggested by the Bank of Russia, warning that such a move could backfire and lead to a stalled Russia in terms of innovation in the technology industry.
“We need to regulate, not ban,” said the director of the financial policy department of the Ministry of Finance, Ivan Chebeskov, on Tuesday.
Although Putin is mostly in favor of enabling bitcoin miners to operate in the country, the three people familiar with the matter also told Bloomberg that the Russian President “supports the proposal to restrict mining to regions with a surplus of electricity, such as Irkutsk, Krasnoyarsk and Karelia.”
The Eastern European country’s energy surplus led it to become a hotbed for bitcoin mining after a Chinese ban of the activity last year triggered an exodus of miners out of the Asian country, most of which found a new home in the U.S., Kazakhstan, and Russia.