Russia’s government has passed two significant laws that legalize virtual currency mining and set the stage for the central bank to utilize cryptocurrencies for international transactions.
The State Duma, the lower house of the Russian parliament, has approved cryptomining for legal entities and entrepreneurs. Under the new regulations, interested parties must submit their information to relevant Russian agencies for tracking purposes. Individuals who stay within government-set energy limits can mine without registration, but the government retains the authority to ban mining in certain regions.
The law mandates that miners report their activities to the local financial monitoring service and provide their wallet addresses to Russia’s security services.
A separate crypto bill, set to take effect in September, will allow Russia’s central bank to establish an “experimental” infrastructure for using cryptocurrencies in cross-border payments. Currently, the use of digital currency for payments is prohibited in Russia.
This new crypto regulation comes as Russia faces continued economic pressure from global sanctions imposed after its invasion of Ukraine. These sanctions have isolated Russian companies from the global dollar system and led the Moscow Exchange to halt trading in U.S. dollars and euros.
Anton Gorelkin, deputy head of the committee on information policy and one of the bill’s authors, stated that Russian authorities view cryptocurrencies “primarily as a tool for circumventing sanctions.”
Russia’s stance on cryptocurrencies has evolved, with President Vladimir Putin recently highlighting digital currencies as “a very dynamic and promising direction of the modern economy.” He emphasized the need for Russia to promptly establish the legal framework, develop infrastructure, and create conditions for the circulation of digital assets domestically and internationally.
Despite these advancements, significant limitations still hinder the local crypto industry. The new law does not lift the existing ban on cryptocurrency payments within Russia. Additionally, advertisements for cryptocurrencies and companies offering crypto services remain prohibited.
Earlier this month, Putin blamed cryptominers for electricity shortages in Buryatia and the Irkutsk region. In response, Russia’s Ministry of Energy proposed increasing tariffs for miners by five to ten times to prevent a deficit.
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