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BRICS issues major warning on cryptocurrencies
BRICS is issuing a new warning regarding cryptocurrencies and the mining process. According to Russian President Vladimir Putin, unregulated cryptocurrency mining can cause several blackouts and power outages. The BRICS member says that more regulation in mining is needed to protect Russia’s power grids from these outages.
“An uncontrolled increase in electricity consumption for cryptocurrency mining may lead to energy shortages in some regions,” Putin told senior government officials in a recent meeting. According to the Russian Energy Ministry, cryptocurrency mining consumes an average of 16 billion kilowatt hours per year. That’s nearly 1.5 percent of Russia’s total electricity consumption, which Putin believes will increase without regulation. “The figure continues to rise,” Putin said.
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Russia warns BRICS to be careful about cryptocurrency mining
Russia has very strict laws regarding cryptocurrency. In 2020, Putin signed a law that legalized cryptocurrency as a digital financial asset, but banned its use to pay for goods and services. However, crypto mining remains popular in the country, partly due to Russia’s low cost of electricity and access to equipment. Russia only ranked second behind the United States in terms of the world’s largest crypto mining countries. Another BRICS nation, China, used to be prominent on the list, but has since restricted crypto mining.
Russian President Putin shared concerns from regional authorities on Wednesday that the mines could leave “new businesses, residential areas and social facilities with supply disruptions and put promising investment and infrastructure projects on hold.” Putin ordered tax and fee regulations for miners and called for a federal law to address the issue.
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BRICS and Russia are looking to incorporate cryptocurrency and digital assets into their new world of finance. The bloc believes that these assets could help in the development of their new currency to abandon the US dollar. On the other hand, they would like to regulate the way this cryptocurrency is used and mined to avoid the blackouts that Russia suggests will continue.