Russian President Vladimir Putin has raised the alarm on an impending energy crisis. The culprit? Unchecked growth of bitcoin mining in the country. Yes, this is what President of the country amid conventional war is really worried about.
Putin highlighted the massive power consumption of mining operations. They account for about 1.5% of Russia's total electricity usage. That's a whopping 16 billion kilowatt-hours annually, which would be enough for a number of small countries to survive for years.
The president's concerns focus on regions like Irkutsk, Buryatia, and Zabaikalsky Krai. These areas have been experiencing frequent power shortages. Maybe, military facilities are out of electricity too often, but who knows, they will not tell us the truth anyway.
Putin acknowledged cryptocurrencies aren't conventional money. Yet, he noted their increasing use in international settlements. He emphasized the significant energy demands of digital coin mining.
Russia has become a hotspot for these operations. Low power prices and portable mining equipment are the main draws. Putin cautioned that unchecked expansion could push regional power systems to breaking point.
The energy drain has wider implications beyond just operational costs. Putin stressed broader social and economic risks. He pointed out that power shortages could impact businesses, housing, and public services.
The president's remarks echo concerns voiced by regional leaders. They've highlighted potential disruptions to new businesses, residential areas, and crucial social infrastructure.
"Uncontrolled increase of electricity consumption for cryptocurrency mining may lead to a power deficit in some regions," Putin said. It's not rocket science, folks.
Amid the crypto mining chaos, Putin also took the opportunity to promote Russia's digital ruble. This central bank digital currency (CBDC) is already making waves. Russia's leader is probably impressed by what China does trying to control its citizens with digital yuan project, that has yet to be fulfilled.
The digital ruble has facilitated 7,000 payments for goods and services. It's also enabled over 27,000 transfers. Putin's pushing hard for its adoption, touting these numbers as proof of its "efficiency and usefulness."
The digital ruble is a key player in Russia's broader strategy. It's part of a plan to modernize the financial system and reduce dependence on Western financial institutions. With Western sanctions biting, it's high on Russia's economic agenda.
Putin's government is urging companies to explore cryptocurrencies and other digital assets. They're seen as alternatives to international transaction systems. It's a bold move, to say the least.
The situation's a bit of a mess, really. Russia's juggling economic opportunities with potential risks. It's anyone's guess how this'll play out in the long run.