Bitcoin mining ‘may be strengthening the ruble,’ says Russian central bank

The rapid rise of Russia’s Bitcoin mining industry is bolstering the country’s economy and may be strengthening the ruble.

So says Elvira Nabiullina, the governor of the Russian central bank, although she conceded that “quantifying the impact” of crypto mining is difficult, as illegal and quasi-legal miners make up a “significant portion of the industry.”

“It is probably difficult to quantify the impact of crypto mining right now, because a significant portion of it remains in the gray zone,” Nabiullina said, speaking to the Russian media outlet RBC, “Mining is indeed one of the additional factors contributing to the ruble’s strong exchange rate.”

As Russia continues to promote the growth of industrial mining, the evidence suggests even long-term crypto-skeptics like Nabiullina appear to be ready to make concessions to crypto adoption advocates.

Rise of Russian Bitcoin mining

The central bank, and Nabiullina in particular, have long been opposed to crypto. Nabiullina previously claimed that “private cryptocurrencies” like Bitcoin could damage the Russian economy, and has called for a ban on mining and crypto exchanges.

But in recent years, Moscow has warmed to crypto mining, insisting that miners should set up shop in areas with idle power reserves.

This has led to a rapid rise in both registered miners and illegal operators, the latter of whom have been blamed for power shortages in many traditional Bitcoin mining hotspots.

Earlier this month, a presidential aide said that the “underestimation of monetary flows related to mining and cryptocurrency” was causing “incorrect ruble exchange rate forecasts.”

The aide called the sector “a new export item” that is making its influence felt in the Russian foreign exchange market.

Central bank ready to regulate crypto

RBC also suggested that the year ahead could see the central bank retreat further from its one-time hardline stance.

The media outlet wrote that Nabiullina and the bank are “discussing cryptocurrency regulations” with the Ministry of Finance, the anti-money laundering agency Rosfinmonitoring, and other government bodies.

“Observers expect that future cryptocurrency transactions will be conducted primarily through existing market participants under existing licenses,” RBC wrote.

“Existing market participants” here likely refers to banks and other central bank-supervised financial service providers.

For their part, commercial banking giants like VTB Bank and Sberbank have recently expressed a keenness to launch crypto trading-related services.

This year, VTB, Sberbank, and several others have launched crypto derivatives trading products. Banks say they are ready to launch crypto trading pilots that would allow high net-worth individuals to buy and sell “real” cryptocurrencies like Bitcoin and Ethereum.

Tim Alper is a news correspondent at DL News. Got a tip? Email him at tdalper@dlnews.com.