The Ministry of Economy proposes low rates to connect mining farms to sources of electrical energy. The Central Bank of Russia rejects Bitcoin mining, arguing that it harms the economy and the environment.
The Russian Ministry of Economy recently said that it might allow for Bitcoin (BTC) mining in regions with a constant surplus of electrical power. That would be a sign that the government of Vladimir Putin gives its support to the activity that guarantees the protocol of the pioneering cryptocurrency.
Ministry representatives believe that the proposed measures will help stop shadow mining. They also said that this would contribute to introducing cryptocurrencies into the legal framework of the Eurasian country, although that limits the production of digital currencies.
The regulatory proposal received the support of the Ministry of Energy, but the Central Bank of Russia expressed its rejection of Bitcoin.
Besides proposing to mine Bitcoin in regions with a surplus of energy, the Ministry proposed reduced rates for electricity consumption for that activity.
The Ministry considers it is necessary to recognize mining as a commercial activity. For that reason, they believe that there should be taxes on the conversion of cryptocurrencies into rubles, like in Japan and Germany.
However, they advocate for the government to offer acceptable prices for Bitcoin miners. They think that would eliminate the risks of insufficient power supply to homes, social facilities, and industries in other territories.
To that end, the Ministry proposes low rates to connect mining farms to energy sources. In that way, they seek that prices do not depend on the production site, even if it is in the generation facilities.
Therefore, the Russian Ministry of Economy considers that the connection of mining devices to electricity will be economical.
Russian Central Bank Expresses Its Rejection of Bitcoin Again
Representatives of the Central Bank of Russia recently said that they disagree with the proposals of the Ministry of Economy. They argued that non-productive demand for electricity would cause mining to the economic development.
The institution considers that Bitcoin mining would harm the economy and the environment. They believe that the competitiveness of mining in Russia relates to cheap electricity and the use of the right software and hardware.
In addition, they had proposed on January 20th to make the mining of Bitcoin and other cryptocurrencies illegal. On that date, they argued that those assets pose alleged threats to the well-being of Russian citizens and the stability of the financial system.
The alleged threats that the Central Bank sees in Bitcoin and other cryptocurrencies are volatility and their use in criminal operations. That institution described cryptocurrencies as a financial bubble and a market-determined by speculative demand.
Putin Supports Bitcoin Mining Despite the Request by the Central Bank
The request by the Russian Central Bank had no effect, as President Vladimir Putin expressed his support for Bitcoin mining. The head of state said that the institution does not hinder technical progress and strives to incorporate the latest technologies.
After rejecting the proposals and recommendations of the Central Bank, Putin asked the ministers to discuss the issue and come to a decision.
Last week, Russia was preparing a draft law on the circulation of cryptocurrencies. That implies a radical change to use those assets under a legal and regulatory framework.
The plan does not seem to show any changes in Bitcoin mining, but it does propose recognizing cryptocurrencies as currencies and not financial assets. That implies that they will have to be subject to the laws that apply to fiat money.
The law, which could come out on February 18th, would determine the new direction of the Bitcoin ecosystem in Russia. It is relevant to remember that almost 12% of the population of that country already uses cryptocurrencies.
By Alexander Salazar
