Politics / Regulation
Bitcoin used to be very popular in Russia, perhaps due to it being one of the cheapest ways to send money overseas without using a bank. Due to currency controls, transferring funds overseas from Russia can be costly. The country used to be home to many miners as well, with many of BitFury’s first generation chips sent to and used within Russia. Operational costs for mining are low in the country, due to the availability of cheap electricity and abundance of affordable commercial property. Russian banks were even allowing bitcoin businesses to open accounts; there were plenty of exchanges and local agents operating across the country.
However, when the government realised the potential of bitcoin in the remittance space, their attitude towards the cryptocurrency began to change. Bitcoin gave users the ability to send money overseas, bypassing state currency controls. On top of this, transfers using the Bitcoin network were very cheap – significantly cheaper than traditional “grey schemes” that can be tracked and controlled. Many people expected the monetary regulators to begin attempts to block the new technology. The process started when most Bitcoin companies operating in the country lost their bank accounts, which significantly impaired their ability