Debate rages over whether Russian banks could use crypto such as bitcoin as an alternative currency exchange
Putin was speaking in January, days after the country’s central bank proposed a blanket ban on cryptocurrency trading and mining. In the case of bitcoin, the cornerstone cryptocurrency, mining is the energy-intensive process by which computers verify new bitcoin transactions – putting them on a virtual ledger known as a blockchain – and generate new bitcoins as a reward for that work.
The Bank of Russia was emphatic in its warning, saying that cryptocurrency mining entailed “significant risks for the economy and financial stability.” One week later, Putin appeared to be less sure, pointing that Russia had advantages in cryptocurrency mining due to its huge energy wealth and expertise in the field.
Putin’s doubts about a full crypto-embargo might well have deepened after the west applied massive pressure to Russia’s financial system with new sanctions. The EU, US, UK and Canada have targeted the country’s $640bn (£478bn) in foreign currency reserves – a financial buffer held as a back-up to deal with emergencies and provide financial stability – by agreeing to “prevent the Russian central bank from deploying its international reserves in ways that undermine the impact of our sanctions.”
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