FX168 Financial News Agency (Europe) Russian President Vladimir Putin said that the country has become a world leader in Bitcoin mining. He explained that this is due to the energy surplus that can be used in regions such as Siberia, but also warned that these activities should not hinder the development of the region. Data shows that 54,000 bitcoins will be produced in 2023.
Putin mentioned Russia's Bitcoin mining capabilities and what makes the country fertile ground for this industry. In his speech at the plenary session of the Eastern Economic Forum (EEF), Putin acknowledged that Russia has become a leader in the industry due to the rich energy resources in its region.
According to the Russian portal Izvestia, Putin said: "Russia is today one of the world leaders in mining, and the reason is the energy surplus in Siberia."
However, Putin warned of the possible impact of the spread of Bitcoin mining in Siberia, explaining that other uses of these energies are also important for the development of the country. "Mining is good, but the construction of housing, industrial and social facilities, as well as the supply of electricity to planned production facilities, are equally or even more important," he stressed.
According to a report by Sergey Bezdelov, director of the Industrial Mining Association, Russia produced 54,000 Bitcoins in 2023, bringing the state more than $550 million in tax revenue. However, Bezdelov assessed that this figure will increase due to the recently approved law on cryptocurrency mining, as new investors will flow into the field.
According to a recent Policy and Regulation report by Chainalysis, Russia is taking bold steps to counter Western sanctions by passing legislation to legalize cryptocurrency mining and allow the use of cryptocurrencies for international payments. This marks a major policy shift in the country, which once placed strict restrictions on cryptocurrencies.
Chainalysis said the bills, signed into law by Putin on August 8, are part of Russia's broader strategy to develop alternative payment methods and reduce its reliance on the U.S. dollar.
The new legislation, which came into effect in September for cross-border payments and in November for mining, opens the door for Russian companies to use cryptocurrencies for international trade. The move comes at a critical time when Russia faces increasing economic pressure from Western sanctions.
Chainalysis noted that the Central Bank of Russia (CBR), which previously advocated a ban on cryptocurrencies, now plays a key role in regulating these activities and ensuring state oversight.
The agency mentioned that Putin’s government has recognized the growing importance of cryptocurrencies in global payments. Putin himself also emphasized that Russia cannot miss the opportunity to regulate digital assets, which he believes is a means to reduce dependence on the Western financial system.
Chainalysis further explains that key officials, including Russia’s central bank governor Elvira Nabiullina and the bill’s author Anton Gorelkin, have publicly acknowledged that the laws are intended to mitigate the impact of sanctions .
Although Russia’s ban on domestic cryptocurrency payments remains in effect, Chainalysis stressed that it has not significantly affected widespread cryptocurrency usage in the country. Russia has consistently topped Chainalysis’ global cryptocurrency adoption index, and the new legislation is expected to further boost cryptocurrency adoption.
Chainalysis also reported that Russia had been gradually integrating cryptocurrencies into its economy long before these laws were passed, with Russian billionaire Vladimir Potanin’s Rosbank as early as 2023 In June, it took the lead in launching cross-border cryptocurrency payments.
Chainalysis stated that the Russian Central Bank is leading efforts to integrate cryptocurrencies into the cross-border payment financial system, and experimental infrastructure is currently in place. The agency explained that this move will allow approved Russian businesses and mining entities to use cryptocurrencies in international trade. Chainalysis believes that this move is aimed at easing the pressure of Western sanctions and opening up new channels for international trade.
Chainalysis highlighted that the legislation gives the Russian Central Bank greater control over cryptocurrency activities in Russia, consolidating its regulatory powers. The agency also noted that while the Russian central bank is developing a central bank digital currency (CBDC) called the Digital Ruble, which is expected to be launched in 2025, the new law allows the use of existing cryptocurrencies under central bank supervision.
Chainalysis reports that this strategic shift is consistent with Russia’s broader efforts to bypass the U.S.-dominated financial system. Russia also plans to launch two new cryptocurrency exchanges, one in St. Petersburg and the other in Moscow. These exchanges are expected to play a key role in facilitating cross-border cryptocurrency trading, although the legal framework for these platforms is still evolving.
Chainalysis explains that the St. Petersburg-based exchange may utilize the infrastructure of the St. Petersburg Currency Exchange, although the entity has denied involvement.
Chainalysis noted that Russia already has several prominent non-KYC exchanges, such as Garantex and Tetchange, which operate out of the Moscow International Business Center. The agency mentioned that Garantex still plays a central role in the Russian cryptocurrency market despite facing sanctions from the US Treasury Department and the UK Office of Financial Sanctions Implementation (OFSI).
Chainalysis also highlighted that Garantex’s deep liquidity on major blockchains makes it a likely candidate for state-sanctioned crypto trading.
Chainalysis believes that Russia’s decision to legalize cryptocurrency mining is another important aspect of its strategy to circumvent sanctions. The new law introduces a structured framework for mining activities, requiring approved entities to register their operations and report to financial authorities.
Chainalysis observed that the move is part of Russia’s long-term goal to become the global leader in cryptocurrency mining, aiming to overtake the United States.
Alex
Kikyo
Hui Xin
Brian