Russia’s Crypto Mining Legislation Heads to Parliament

Russia is about to legalize the mining of digital currencies, including Bitcoin (BTC), after a State Duma committee adopted a bill that will be voted on on July 23.

The goal of the measure, which was drafted by a group of MPs that included State Duma Committee on Financial Markets chairman Anatoly Aksakov, is to regulate cryptocurrency mining, which is now covered by a legal murky area.

The Russian Ministry of Finance proposed allowing traditional stock exchanges such as the Moscow Exchange to provide cryptocurrency trading services to certain qualified investors, also consider allowing the central bank to start creating an experimental cryptocurrency platform…

— Wu Blockchain (@WuBlockchain) July 15, 2024

The industrial crypto mining business in Russia has been actively campaigning for the new legislation. Legalizing mining would draw in new investors while also requiring miners to pay taxes. At the moment, mining is neither permitted nor prohibited, and the only thing power providers can do is ban miners they suspect of stealing electricity.

November 2022 saw the introduction of the law in its initial form. The most recent version designates the Ministry of Digital Development as the compliance monitor and grants the Russian government and Central Bank regulatory authority. For Russian businesses and independent entrepreneurs that want to mine bitcoins, it suggests creating a central registry.

However, the measure provides considerable leeway for home-based and small-scale miners. Bitcoin miners are exempt from registration requirements as long as they stay within predetermined energy usage thresholds. In earlier drafts, it was suggested that electricity companies might target home-based miners and that all types of private mining should be prohibited.

The bill has anti-money laundering (AML) provisions to stop the usage of cryptocurrency for illicit purposes. In addition to reporting their mining activity, miners will need to reveal specific addresses where their cryptocurrency is kept. A list of questionable addresses linked to money laundering and terrorist financing will be kept up to date by Rosfinmonitoring, Russia’s anti-money laundering agency.

Russia’s elite may soon trade digital currencies on top exchanges! Find out how the Ministry of Finance's proposal could transform crypto trading for select investors. 💼https://t.co/tLdnifFYe5#Russian #cryptocurrencies #FinancialAssistance #DigitalWorld #Bitcoin #Solana #ETH pic.twitter.com/P299H1e092

— Ledger Life (@ledgerlifeio) July 15, 2024

The bill permits the government to outlaw mining in specific areas, which allays worries expressed by the Ministry of Energy and power firms. In addition, the Ministry of Finance has put out its own proposals, which include restricting professional investors’ access to cryptocurrency exchanges and enabling cryptocurrency transactions for cross-border trade—particularly in the context of Western sanctions.

Over 90% of Russian cryptocurrency miners, according to industry estimates, concentrate on Bitcoin, with a lesser proportion mining altcoins like Litecoin (LTC). For many miners, who have been operating in uncertainty, the bill’s progress is encouraging. Aksakov’s earlier suggestion in March that cryptocurrency regulation might be delayed until 2025 has reassured the industry regarding this recent development.