Putin Warns of Power Shortages Due to Cryptocurrency Mining Surge

Russian President Vladimir Putin expressed concerns about cryptocurrency mining and its impact on electricity supply. During an economic meeting, he highlighted the growing use of digital currencies worldwide. Putin emphasized that while cryptocurrencies are increasingly used for international payments, their mining requires significant electricity, according to Kommersant.

In Russia, mining consumes 16 billion kWh annually, about 1.5% of the country’s total electricity usage. This growing demand has already caused power shortages in regions like Buryatia, Irkutsk, and the Trans-Baikal Territory. He warned that uncontrolled electricity consumption for mining could worsen these shortages, impacting businesses and residential areas.

Putin has directed the regulation of cryptocurrency mining, focusing on taxation and tariffs. On July 12, the State Duma Committee approved a bill to legalize mining. The initiative aims to create legal conditions for mining, boost budget revenues, and regulate digital currency circulation.

The President emphasized the importance of developing infrastructure and creating a legal framework for digital assets. He mentioned the Central Bank’s pilot project on the digital ruble, involving 12 banks and numerous participants. This project has already facilitated over 27,000 transfers and 7,000 payments.

To address the electricity issue, Putin urged timely decisions at the federal level. He stressed the need to balance cryptocurrency mining with the country’s power needs, ensuring stable electricity supply for new enterprises, residential areas, and social facilities.

Putin’s statements reflect Russia’s approach to integrating digital currencies while managing the challenges posed by their mining activities. The government’s regulatory efforts aim to balance innovation with practical energy consumption considerations.