Russia’s President Putin is worried about a potential energy crisis caused by the rapid growth of Bitcoin mining in the country. He’s concerned that the massive amount of electricity used for mining could lead to power shortages, especially in regions like Irkutsk, Buryatia, and Zabaikalsky Krai.
Bitcoin Mining’s Energy Appetite
Putin pointed out that Bitcoin mining currently consumes about 1.5% of Russia’s total electricity, which translates to a huge 16 billion kilowatt-hours per year. This is because Russia has become a popular hub for Bitcoin miners due to its low electricity prices and the ease of moving mining equipment.
Consequences of Uncontrolled Mining
Putin emphasized that the excessive energy consumption from Bitcoin mining could have serious consequences beyond just higher energy bills. He warned that power shortages could impact businesses, homes, public services, and overall city development.
The Digital Ruble as a Solution?
In the midst of the Bitcoin mining crisis, Putin also highlighted the potential of the digital ruble, Russia’s central bank digital currency (CBDC). He emphasized the success of the digital ruble’s pilot program, which has already processed thousands of payments and transfers.
Putin sees the digital ruble as a crucial part of Russia’s plan to modernize its financial system and reduce its reliance on Western institutions. He’s pushing for the use of the digital ruble and other digital assets as alternatives to traditional international payment systems.
Balancing Opportunity and Risk
Russia faces a challenge in balancing the economic opportunities presented by cryptocurrency mining with the potential risks to its energy infrastructure. Putin’s call for legislative action and the promotion of the digital ruble show that the government is taking this challenge seriously.
