Despite the ongoing conflict in Ukraine, the Russian Federation recently announced that energy production could be increased in response to the increased demand from crypto miners.
The Federation wants to legalize cryptocurrency to conduct international trade, which may explain the increase in crypto mining.
In Siberia, an additional power plant may be needed to meet the growing demand for electricity by the industry, according to the Russian energy minister.
Since the beginning of Russian “special military operations” in Ukraine, the country has been the subject of domestic and international controversy.
Now that the country has been sanctioned by the European Union and the United States, its international assets have been seized, and its banking system has been removed from SWIFT.
Russia’s Minister of Energy, Nikolay Shulginov, acknowledges the growing demand for energy from cryptocurrency miners across Siberia.
Shulginov is aware, according to local newspapers and crypto-focused media, that more power facilities are required to meet their requirements.
A digital Ruble may even be considered in Moscow to cater to crypto miners’ energy needs, which was also followed by India in the regulation of digital assets.
As a result of sanctions imposed on the country by the West, attitudes have fundamentally changed from outright banning crypto to legalizing it.
Russians are able to conduct international trade through crypto due to little regulation in the West regarding the use of crypto in international trade.
However, the country is still unwilling to let its citizens use crypto as a payment method, despite experiencing a mining revenue boom last year. As a result, the Russian Federation is looking to leverage cryptocurrency to boost foreign trade.
According to Shulginov:
“The Ministry of Energy has always considered it essential to create improved working conditions for the mining industry.”
The cryptocurrency market would certainly be affected by increased energy production just for crypto mining. According to the Bitcoin hashrate report for January 2022, the country contributed 8.7% to the total hashrate.
A rise in the number of mineable cryptocurrencies could lead to a fall in price as more cryptocurrencies enter the market. As a result of the Federation’s public stance on crypto as a means for conducting and boosting international trade, the drop is expected to be minimal. However, it can still be felt, especially in Bitcoin and Ethereum.
Upon the end of the war on Ukraine and its subsequent consequences, Russia could become a hub of Web3 and DeFi once digital assets are legalized and regulated, as well as mining activity increases.
The crypto market will have to wait and see whether crypto will have an impact on Russia’s struggling economy in 2023.