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Russia legalizes cryptocurrency mining as global sanctions rock traditional finance
The Russian government passed two laws on Tuesday that legalize virtual currency mining and pave the way for its central bank to use crypto for international payments.
The lower house of the Russian parliament, the State Duma, Approved Cryptocurrency mining for legal entities and entrepreneurs. Interested persons must submit their information to the relevant Russian agencies so that they can be tracked, in accordance with the new rules.
People who comply with government-set energy limits can mine without registering. The government may also ban mining in some regions of Russia.
Under the law, minors will be required to report their activity to the local financial monitoring service and provide their wallet addresses to Russian security services.
A separate bill on cryptocurrencies, set to come into force in September, would allow the Russian central bank to create an “experimental” infrastructure for using cryptocurrencies in cross-border payments. Under current rules, the use of digital currency for payments is prohibited in Russia.
The new cryptocurrency regulations come as global sanctions imposed on Moscow following its invasion of Ukraine continue to weigh on the Russian economy. isolated Russian companies were excluded from the global dollar system and forced the Moscow Exchange to stop trading in US dollars and euros.
One of the authors of the cryptography bill, Anton Gorelkin, who is also deputy head of the Committee on Information Policy, said Russian authorities view cryptocurrencies “primarily as a tool to circumvent sanctions.”
Russia’s attitude towards cryptocurrencies has evolved over time, and earlier this month Russian President Vladimir Putin called Digital currencies are “a very dynamic and promising direction of the modern economy.”
“It is important for us not to miss the moment and quickly establish the legal framework and regulations, develop infrastructure and create conditions for the movement of digital assets, both within the country and in relations with foreign partners,” he added.
Many restrictions still prevent the local cryptocurrency industry from developing. The new law will not lift the current ban on cryptocurrency payments in Russia. In addition, advertisements for cryptocurrencies and companies offering cryptocurrency services remain prohibited in the country.
Putin too blame Cryptocurrency miners were alerted earlier this month about the electricity shortage in Buryatia and the Irkutsk region. The Russian Energy Ministry even proposed increasing tariffs for miners by five to ten times to avoid a deficit.
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