Russia’s State Duma legalizes crypto mining and payments

Russia’s State Duma has passed a new bill that regulates crypto mining, allows crypto payments for international trade, and lays down a framework for the industry’s growth.

The bill makes Bitcoin and other cryptocurrency mining legal. Before this, mining was happening under the radar. Now, only Russian legal entities and registered individual entrepreneurs can do large-scale mining. 

Regular citizens can mine too, but only if they don’t use too much electricity. As Cryptopolitan reported before, Vladimir Putin was unhappy with the way miners used to operate.

Now the Ministry of Digital Development says it will make sure everyone follows the rules. And if certain areas face energy shortages, the government can still ban mining there. 

This was a real concern, especially after places like Dagestan had power issues because of unregulated mining.

Crypto for international trade and payments

The new law also allows using crypto for international trade payments. This is a big deal because Russian banks have had a hard time with international sanctions. 

Now, Russia can trade with key partners like China, India, the UAE, and Turkey using crypto. This bypasses the traditional banking systems, which have been unreliable under Western pressure. 

But within Russia, you still can’t use crypto for payments. The new rules say cryptocurrency can’t be circulated or advertised domestically. You can mine and distribute within mining pools, but that’s it.

The legislation also brings in strict reporting requirements. Miners must report the cryptocurrency they get from mining. They need to provide address identifiers for transaction records.

Rosfinmonitoring, Russia’s financial monitoring service, will keep a list of address identifiers suspected of money laundering or terrorist financing.

Industry development and investment

This bill is expected to boost the crypto industry in Russia. It’s supposed to help the industry grow, attract investment, and create jobs. Analysts say Russian miners produced about 54,000 bitcoins worth over $3.5 billion last year. 

The law basically wants to make crypto one of Russia’s main export items. Energy consumption is a big part of this discussion. 

Russia reportedly uses 16 billion kWh annually on mining, which is about 1.5% of the country’s total electricity consumption.

The regulatory framework is now clear. The government and the Bank of Russia will set the standards for mining activities. The Ministry of Digital Development will ensure compliance. 

There will be a federal authority responsible for overseeing the industry’s tax compliance and preventing illegal operations. The new law is set to take effect on September 1st this year.