Russia is seeking to regulate crypto mining despite the rise in electricity consumption in the country. In a speech issued today on the United Russia discussion forum, the Russian Deputy Head of the Ministry of Industry and Trade stated that they are moving to regulate crypto mining. His remarks came as he was discussing the advancement of blockchain technologies. Besides, he also focused on the regulation of digital financial assets.
Although mining activities lie under a gray zone, there are claims that it uses more than 2% of all the electricity produced in Russia. That is even greater than the amount of energy supply that the Agriculture sector consumes.
Russia’s Central Bank made a publication of findings on crypto research. It included a recommendation to outlaw operations related to cryptocurrencies in the nation. Yet, discussions on the legalization of cryptocurrency mining in Russia got underway.
Russian Prime Minister Mikhail Mishustin mentioned the crypto ban during an earlier interview. He disclosed that the government and the Central Bank had reached an agreement to ban the use of cryptos as a form of legal tender. However, the regulation of mining activity was still up for debate.
According to Vasily Shpak, Russia’s Deputy Minister of Industry and Trade, mining bitcoin should fall under industrial activity. Although bitcoin exists in a limbo state at the moment, it consumes a significant amount of electricity. He believes that people should acknowledge mining, regulate, and integrate it into industrial activity.
Other sections amended
Towards the end of April, the state Duma received a law entitled “On Mining in Russian Federation.” Duma is the lower house of the Russian parliament.
The measure makes it necessary for all crypto users and miners in the country to register. The law specifies that mining rights are a preserve of the registered businesses. Registered miners got amnesty in the form of a scheme that allowed them to clear themselves with customs. A little over a month later, a revision of the framework of the law to regulate cryptocurrency mining has taken place.
The first draft of the new bill, given to the house on Friday of last week, contains several important provisions that were left out of the new measure. They modified the wording in the legislation, yet specific subsections are missing from them. This is only relevant in a general sense. Some sections were fundamental yet incomplete. They included the creation of a mining registration for users and the guarantee of amnesty to those registered users.
Since there is a lack of mining registration, a unified method is critical for enthusiastic miners. They “might perhaps incur costs on the federal budget,” so the offer of amnesty is out as an option at this point.
Russia’s digital currency legalization
Besides mining, there are other changes in the draft law “On Digital Currency.” The goal was to incorporate many proposals from other government departments and organizations.
Russia’s financial watchdog, Rosfinmonitoring, and the economy, digital development, and interior affairs ministries initiated the amendments. The Central Bank of the Russian Federation is the only major institution missing from that list. So far, it continues to reject any legalization of cryptocurrencies such as bitcoin. Thus, it opposes Minfin’s regulatory idea, which attempts to build a legal market for digital assets.
Russian authorities have rejected cryptocurrencies as legal tender. The law “On Digital Currencies” prohibits the use of crypto assets as a form of payment. However, it recommends that they can be recognized as a form of investment. Nonetheless, the Vedomosti newspaper said that provisions included in the recent amendments are significant steps. It enables Russian legal firms and individual businesses to use crypto to make overseas payments.
Russia has an urge to embrace crypto as mitigation on sanctions labeled against it after invading Ukraine. The country so far lacks a standard payment method with international partners.