RRussia has proposed a blanket ban on bitcoin, fearing that cryptocurrency mining could threaten the country’s energy supply.
Russia’s central bank has warned that mining digital assets poses a risk to the dominant energy sector.
He also said that cryptocurrencies had all the hallmarks of a pyramid scheme and undermined the sovereignty of monetary policy.
To mine cryptocurrency, networks of independent computers perform complex calculations. Once they are completed, the network is rewarded with new digital coins.
These activities consume large amounts of energy which, if derived from fossil fuels, harms the environment.
Russia is home to a thriving crypto industry, with its largest mines located in the north and in Siberia.
It is the third-largest crypto mining nation in the world, home to around one-tenth of the world’s Bitcoin supply business.
The country had played an increasingly prominent role in the sector after last year’s crackdown by China’s ruling Communist Party.
However, Bitcoin rose more than 3% to nearly $43,000 on Thursday afternoon, unlike a selloff last September when China made crypto transactions illegal.
Analysts say traders aren’t as spooked this time around because the industry has experience dealing with unfavorable policies.