Bitcoin Mining Dominance a ‘National Security Concern’ For US, Says MARA CEO

• MARA CEO Fred Thiel warns that Russia’s dominance in Bitcoin mining poses a national threat to the U.S.
• Russia claims to have mined 54,000 BTC in 2023, worth roughly $3 billion today.
• Russia is developing a stablecoin pegged to the yuan and other BRICS currencies.

MARA (formerly Marathon Digital) CEO Fred Thiel believes that Bitcoin (BTC) is a “national security concern” in more ways than one. But it’s not all doom and gloom.

If anything, it highlights how the king of crypto has become a force of its own and how necessary it is to be competitive and innovate on crypto at a national level.

Bitcoin Dominance

Speaking at a Bitcoin Mining Panel on Sept. 10, Thiel stated that BTC is a national security concern, largely because of Russia’s Bitcoin mining dominance.

Theil posits that Russia is now the second-largest Bitcoin mining nation, which poses a risk to U.S. investors, companies, and other entities involved with or holding BTC.

“If the U.S. does not have a substantial amount of Bitcoin mining on-shore, they can be locked out, and U.S. companies can be locked out of transacting their Bitcoin,”

He goes on to explain that for companies holding BTC directly or through exchange-traded funds (ETFs), or if they’re a mining company, the U.S. “must maintain dominance.”

Similarly to the U.S.’ gold reserve dominance, which he says allows the nation to exert influence in financial markets, the U.S. has to do that “as the world transitions to digital currencies.”

Russia’s Mining Push

Russia’s citizens and businesses have increasingly turned to cryptocurrencies to skirt economic woes and sanctions following its invasion of Ukraine. This has forced the government to bring some regulations to the market to prevent capital outflows from its dwindling economy.

In recent weeks, Russian President Vladimir Putin signed off on legalizing crypto mining. The new infrastructure looks to leverage the nation’s Siberian energy surplus to power its mining hub ambitions.

Hot on the trail of this news, Putin declared  that Russia had become the world’s leader in BTC mining because of these abundant energy resources.

Speaking with Russian media on Sept. 5, he claimed the nation had mined 54,000 BTC in 2023 alone. This brought in around 50 billion rubles in state treasury taxes, or roughly $550 million.

Furthermore, if true, that meant Russia mined around $3 billion worth of BTC in 2023 (at today’s prices). According to Sergey Bezdelov of the Industrial Mining Association, fresh mining figures  will be published soon.

Crypto in Russia

Despite a domestic ban on cryptocurrencies, Russian officials are pushing to see “several legislative barriers” removed so that companies can use digital assets in foreign trade.

At present, Russia is trialing crypto cross-border transactions, and it is said to be working on the establishment of two new digital exchanges to support foreign trade and economic activities. This also includes the development of stablecoins pegged to the yuan and BRICS member currencies.

Similarly to that of Iran, North Korea, Venezuela, and other economically sanctioned/challenged nations, crypto has become an increasingly valuable tool to skirt said woes.

However, with its latest push to become a global BTC mining hub, Russia’s lofty ambitions could be met with rigorous competition from the States. However, this would largely depend on who the next U.S. President is and whether they agree at all with Thiel’s concerns.

About the Author

Eddie Mitchell

Eddie has been writing news and content primarily for crypto news and industry players over the past seven years. With an eye for the bigger picture, Eddie prefers to investigate the broader implications of a story, as well as explore the weird and wonderful world of crypto. He believes blockchain has already changed the world, but observes the space overall with a skeptical and adoring eye.

See more

[email protected]