Russia will step up cryptocurrency mining to avoid double sanctions?
Ever since sanctions were imposed on Russia, many have debated the possibility that cryptocurrencies could offer a way out for the Eastern European country. While some believe they can use cryptocurrencies to avoid sanctions, others argue that it will be futile as ruble transactions are rare and sanctions will be imposed.
David Carlisle, director of policy and regulatory affairs at blockchain analytics firm Elliptic, argued that Russia’s next step in evading sanctions could be to invest in mining:
“It shouldn’t be difficult for the Russian government or certain sanctioned institutions to consider mining as a way to access Bitcoin. They can be converted into goods and services or just cash.”
Although the Central Bank of Russia has stated its position with the proposal to ban mining and trading, President Putin disagrees and supports cryptocurrency mining. Given the energies Russa has, does bitcoin mining offer an easy way around sanctions?
Bitcoin mining card. Source: ccaf.io
Many countries have continued to invest in mining. According to Cambridge University’s Center for Alternative Finance, Russia lags behind the United States and Kazakhstan in bitcoin mining, generating 11.23% of all bitcoins. The top 8 countries in the ranking are:
- United States with 35.4%
- Kazakhstan with 18.1%
- Russia with 11.23%
- Canada with 9.55%
- Ireland with 4.68%
- Malaysia with 4.59%
- Germany with 4.48%
- Iran with 3.11%
Bloomberg believes that increasing Russia’s existing mining capacity will not benefit them from sanctions. Although the country is rich in energy, given the size of Russia’s financial markets and its economy, the country will not be able to mine enough Bitcoin to make a significant financial difference to its economy.
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According to Cryptoslate