Russian President Vladimir Putin has issued a warning about the potential power shortages that could arise from Bitcoin mining activities, urging the expansion of the central bank digital currency (CBDC) to address the issue. During a meeting on July 17, Putin expressed concerns about the uncontrolled electricity consumption by Bitcoin and other crypto mining facilities, leading to power shortages in regions like Irkutsk, Buryatia, and Trans-Baikal Territory.
He emphasized that this issue could have serious consequences for enterprises, residential areas, and social facilities, potentially disrupting investment and infrastructure projects. Putin highlighted that crypto mining in Russia currently consumes 16 billion kilowatt-hours annually, accounting for 1.5% of the country’s total electrical consumption, with usage on the rise due to low electricity prices and easy equipment mobility.
In response to the growing concerns, Russian lawmakers are set to discuss draft legislation that would restrict large crypto-mining operations to approved companies and allow the government to prohibit mining activities in regions facing energy shortages. Additionally, a draft bill has been approved to decriminalize crypto mining while banning crypto circulation, although current laws in Russia already prohibit crypto settlements.
Putin also stressed the need for a wider implementation of Russia’s CBDC, the digital rouble, following a successful pilot program that involved over 27,000 transfers and 7,000 payments for goods and services. The pilot program demonstrated the CBDC’s performance and functionality, with participation from 12 banks, 600 individuals, and 22 trade and service enterprises across 11 cities.
Chairman of the Russian State Duma’s Financial Markets Committee, Anatoly Aksakov, previously mentioned that Russia could start using the digital rouble for domestic transactions in the second half of 2025, after completing testing. The central bank initiated the pilot program in August 2023 to explore the potential of the digital rouble in the country’s financial system.
Overall, the Russian government’s efforts to regulate crypto mining activities and promote the use of the digital rouble highlight the evolving landscape of digital currencies in the country. By addressing power shortages and enhancing the adoption of CBDCs, Russia aims to navigate the challenges posed by the growing cryptocurrency industry while leveraging the benefits of digital assets for its economy and financial system.