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Central Bank of Russia Says the Legalization of Crypto Mining is Risky

ByLouis Adams

Jan 28, 2022 #mining, #Russia
Reading time: < 1 minute

The Central Bank of Russia thinks crypto mining poses significant threats to the Russian economy and citizens, so it considers it appropriate to ban it in the country.

According to the Central Bank, mining generates demand for infrastructure for conducting operations with cryptos, which enhances the negative effects of the spread of this type of asset and creates incentives to circumvent regulation. The bank said:

“We consider it appropriate to ban mining in Russia. It should also be emphasized that blockchain and mining should not be identified, mining is not needed for all cryptocurrencies.”

Overloading power grids due to mining can lead to accidents and jeopardize the power supply of other infrastructure, and the growth of energy consumption can constrain the development of other sectors of the economy. The regulator said:

“The competitiveness of mining in Russia is connected not with the use of high technologies, but with cheap electricity.”