As an analyst with over two decades of experience in global finance, I have witnessed the evolution of financial systems in various countries and their responses to external pressures. In the case of Russia, the recent developments surrounding Bitcoin are not only intriguing but also indicative of a larger geopolitical shift.
On Wednesday, Russian Finance Minister Anton Siluanov disclosed that local businesses have started using Bitcoin and other digital currencies for cross-border transactions. This shift is facilitated by recent legal changes aimed at countering Western sanctions.
It’s worth mentioning that these sanctions have created difficulties for Russia in its trading relationships, particularly with major partners like China and Turkey. Banks within these countries are adopting a more conservative stance to prevent potential repercussions from Western regulators.
In a statement to a Russia 24 television channel, Siluanov said,
In our ongoing experiments, it’s feasible to employ Bitcoins, which we mine here in Russia, for international trades. These types of transactions are already being carried out, and we advocate for their growth and advancement. I am optimistic that they will expand significantly next year.
Putin Backs Bitcoin as Alternative
Earlier this month, President Vladimir Putin implied his approval of the increasing use of cryptocurrencies like Bitcoin, stating that the U.S. administration’s tendency to use the dollar for political manipulation is weakening its status as the world’s primary reserve currency. This has led numerous nations to seek out alternative financial assets, and he specifically pointed out Bitcoin’s ability to evade global regulation as one of its key benefits.
Worldwide enthusiasm for Bitcoin soared this month as its price climbed above $100,000, and this surge was particularly noticeable in Russia where crypto exchange web traffic increased by 8%. This information comes from a report by MegaFon. The growth can be attributed not only to Bitcoin’s price movement but also to regulatory changes and global trends. According to MegaFon’s research, the top 20 global exchanges saw an 8%-10% rise in visitors every month, with Russian users making up 27%-30% of that traffic.
Expansion, Crackdown, and Extended Winter Bans
2021 sees Russia allowing cryptocurrencies for international transactions and intensifying measures to legitimize mining operations, aiming to strengthen its standing as a leading nation in Bitcoin mining on a global scale.
Russian authorities have stepped up their efforts to curb illegal cryptocurrency mining, particularly in the Irkutsk region. In a joint operation with law enforcement, the Irkutsk Electric Grid Company shut down an unregistered crypto-mining facility that was using more than 200 ASIC rigs, consuming around 600,000 kilowatt-hours per month, which is roughly equivalent to the electricity consumption of 80-100 homes. Despite being registered as a business, this operation allegedly did not comply with crypto-mining registration regulations.
Starting from 2025, Russia’s winter ban on cryptocurrency mining will continue until 2031, affecting regions like Dagestan, Chechnya, and Siberia. During peak energy periods, this ban will be enforced. Crypto mining, which uses about 1.5% of the nation’s power, has led to issues with electricity billing and grid stress due to its high energy consumption.
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2024-12-26 10:04