Russian President Vladimir Putin on Wednesday warned about cryptocurrency mining in Russia, saying it risked eating up too much of the country’s electricity supply and leading to regional power shortages.
Russia is one of the world’s top cryptocurrency miners, in which operators of thousands of computers housed in hangers or warehouses validate transactions in return for new cryptocurrency.
But the Kremlin is sceptical of the unregulated industry and a law is currently working its way through parliament to tighten control.
Putin said that “almost 1.5 per cent of the total electricity consumption in the country” was being used up by cryptocurrency mining.
“And the figure continues to grow,” he added during a televised meeting with government officials.
“What we need to pay attention to here, and what is alarming is that uncontrolled growth in electricity consumption for cryptocurrency mining can lead to power deficits in certain regions,” he said.
Putin said three Siberian regions had already seen power shortages as a result of intense cryptocurrency mining.
“The issue is, in fact, acute and fraught with serious consequences,” he said.
Putin did not say how Russia should address the problem, or whether he was proposing restrictions on mining activity, but said “timely decisions” needed to be taken.
Russian lawmakers will next week discuss a flagship bill on regulating cryptocurrency in the country.
The draft includes limiting large-scale mining to approved companies and allowing the government to ban mining in certain regions if the energy supply comes under pressure.
With cheap electricity and cold weather, Russia’s Siberia region has long been a hotbed of cryptocurrency mining.
But Moscow is hesitant to embrace the industry, which touts itself as outside the control of central governments.
Putin also said that the roll-out of a “digital ruble”, an official digital currency backed by the country’s central bank, should be accelerated.