BRICS is issuing a new warning regarding cryptocurrency and the mining process. According to Russian President Vladimir Putin, unregulated cryptocurrency mining can cause several blackouts and power outages. The BRICS member says that there needs to be more regulation in mining to protect Russia’s power grids from these outages.
“An uncontrolled increase in electricity consumption for mining cryptocurrencies can lead to power shortages in certain regions,” Putin told senior government officials at a recent meeting. According to Russia’s Energy Ministry, crypto mining consumes an average of 16 billion kilowatt-hours per year. This equates to almost 1.5% of Russia’s total electricity consumption, which Putin believes will rise without regulation. “The figure continues to go up,” Putin said.
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Russia Warns BRICS To Be Careful With Cryptocurrency Mining
Russia houses very strict cryptocurrency laws. In 2020, Putin signed a law that legalized cryptocurrencies as digital financial assets but banned their use from paying for goods and services. However, crypto mining remains popular in the country, in part due to the cheap cost of electricity in Russia and access to equipment. Russia sat only second behind the United States in terms of the largest crypto-mining countries in the world. Fellow BRICS nation China used to occupy a top spot in the list but has since restricted crypto mining.
Russian President Putin on Wednesday shared the concerns of regional authorities that mining farms could leave “new businesses, residential areas, and social facilities with supply disruptions, and put on hold promising investment and infrastructure projects.” Putin ordered tax and tariff regulations for miners and called for a federal law to address the issue.
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BRICS and Russia are looking to incorporate cryptocurrency and digital assets in their new world of finance. The bloc believes that these assets could aid in the development of their new currency to abandon the US Dollar. On the other hand, they would like to regulate how this crypto is used and mined to avoid the blackouts that Russia suggests will continue.
