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Highlights
- Russia is only behind the US and Kazakhstan when it comes to bitcoin mining.
- Russian Bitcoin miners accounted for 11.2% of the global BTC hashrate according to a report.
- Russian President Vladimir Putin had earlier stated that crypto mining could provide a competitive advantage due to surplus electricity and well-trained personnel.
When Russia invaded Ukraine on Thursday, it was hit with a series of sanctions by the US, UK, and allied NATO nations. Many believed the economic sanctions would obstruct Russia’s attack. However, it is rumoured that Russia may turn to cryptocurrencies to blunt the effects of the sanctions. One of the most significant signs of it is that Russia has managed to continue its Bitcoin mining operations amid all the chaos and destruction.
Crypto mining firm Compass Mining revealed that it would allow its mining infrastructure to remain operational. Contrarily, a few of the crypto mining firms have stopped their services for the Ethereum-focused Flexpool in response to the Ukraine crisis.
Also read: Will Russia start regulating cryptos as currency?
Russia is only behind the US and Kazakhstan when it comes to bitcoin mining. In fact, Russian Bitcoin miners accounted for 11.2% of the global BTC hashrate according to a report. Hashrate refers to the computing power, which the miners need to run software to mine Bitcoin. By doing so, the miners also help thwart attacks on the network.
Bitcoin Mining does give a competitive advantage
With Kazakhstan already struggling with a power crisis and fears of tax hikes, several miners are now looking for other nations to continue with their mining operations. President Vladimir Putin had earlier stated that crypto mining could provide a competitive advantage due to Russia’s surplus electricity and well-trained personnel.
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While there has been a mixed opinion about cryptos in Russia, with the ongoing war, it would be highly improbable that Russia will impose a ban on Bitcoin mining.
With Russia’s Digital Ruble still in the trial stage, cryptos could well be its go-to place for earning revenue. A substantial amount of energy reserves may be diverted towards crypto mining. With the war situation increasingly getting volatile, it won’t be wrong to say that cryptocurrencies will be deeply impact the war.
Also read: How top cryptos performed amid Russia-Ukraine war
Cryptocurrencies still grey area
Cryptocurrencies in Russia are considered to be a grey area. Earlier this week, Russia’s Ministry of Finance had introduced a bill that stated the formation of a marketplace for digital currencies and a licensing regime for the platforms which facilitate digital asset trading.
Additionally, the bill has defined what crypto mining is and a specific law that involves informing the tax authorities about exercise control and supervisory functions.
Overall, it looks like the war will intensify on the political, economic front as well as the crypto front. If Russia decides to turn to cryptos to counter the economic sanctions, then the overall crypto market situation may worsen further.
