Home
News
- Russia has watched the mining sector growing after the blanket ban imposed by china
- The president of Russia, Vladimir Putin acknowledged that cryptos could exist as a means to payment
- Russia explores & prioritizes the possibility of a digital Ruble.
After Chinese authorities imposed a blanket ban on crypto mining, local miners have either gone bust or moved to other countries to pursue their businesses. The United States led the race with a remarkable volume share of Bitcoin mining, reportedly at 35.4%, While Kazakhstan & Russia landed 2nd & 3rd respectively with volume shares of 18.1% & 11.23%.
Russia bagged the 3rd spot because of its cheap electricity rates & not so rigorous regulations towards the crypto sphere. Reportedly the price of electricity costs about $0.06 per K/wh for households & $0.08 per K/wh for business operations. Factoring in other tangents & in contrast to Europe, mining in Russia is 7.5 times cheaper than the latter.
Russia happens to be pretty flexible when it comes to regulations, while the Russian Ministry of Economic Development proposed mining cryptos as an entrepreneurial activity. The Ministry of Finance supported the proposal, Ministry of Energy & The state Duma ( lower house).
However, the country has no mechanism to tax or recognize profits from cryptos, While various bodies of Russian legislatures cannot find a consensus for regulation or recognizing them, consequently the vice president of the Russian Association of Crypto economic, AI & Blockchain, Valeriy Petrov said that the central bank is stalling to make a decisive regulatory move.
The Digital Ruble
There also exists a group of people who opine & are bullish towards the Russian Central Bank (CBDC) or the Digital ruble that could sweep away the market of cryptocurrencies, thereby potentially & eventually becoming void.
In 2020, the Central Bank announced that it was studying a possibility of a digital ruble that would be used both online & offline while stored in specialized wallets. The central bank stressed that the digital currency could be equivalent to the national currency.
The central bank aims to replace cash with digital rubles in the range between 10-30 years. The prototype for the digital ruble is scheduled to be developed by this month while testing of the same shall begin by Jan 2022. In addition to replacement for cash, it is also expected that it will be used to pay taxes in the future.
The central bank also stated that the digital ruble will be stable & safe through hybrid systems based on the principles of centralization & decentralization. It has also developed various multi-level protection against illegal & unauthorized transactions. Maybe even a digital citizen profile & biometrics are expected to be used.
However, some economists in Russia have shared opinions that introducing a digital ruble could kill the crypto markets completely, whereas Russia may even think of prohibiting various other private currencies. The Russian president recently did acknowledge that cryptocurrencies could exist as a means to pay in the future, which gives hopes to mining companies & crypto enthusiasts based out of or residing in Russia.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
