The Russian State Duma has passed legislation legalising crypto mining in the country. This move is seen as a strategic response to ongoing economic sanctions. The new law, approved in both its second and third readings, permits Russian legal entities and individual entrepreneurs registered in a specified registry to participate in cryptocurrency mining activities.
The law, reported by the Latvian-based Russian news outlet Meduza, grants individuals who do not exceed government-set energy consumption limits the right to mine cryptocurrencies without the need for registration.
Anton Gorelkin, Deputy Chairman of the Committee on Information Policy, Information Technologies, and Communications, highlighted the government’s confidence in the energy sector’s ability to regulate and control illicit mining operations. “We believe energy companies have an effective mechanism to control against ‘grey’ and ‘black’ miners,” Gorelkin stated, adding that specific limits will enable energy providers to monitor and hold violators accountable.
Notably, the legislation also eliminates the prohibition on the organisation of cryptocurrency exchanges and trading platforms, which had threatened to shutter Russian cryptocurrency exchanges and service providers. However, restrictions on advertising cryptocurrencies and associated services remain in place, reflecting a cautious approach by the authorities.
The primary motivation behind this legislative change appears to be economic. According to Gorelkin, the Russian government views cryptocurrencies primarily as a tool for circumventing international sanctions and enhancing high-tech exports. He remarked, “Today, Russia ranks second in cryptocurrency mining, and I am confident that with the introduction of this regulation, we will surpass the United States to become the global leader.”
In conjunction with this law, the State Duma has also approved a measure allowing the Central Bank of Russia to initiate an experiment on using cryptocurrencies for international settlements starting from 1 September. This is a significant step given the current legal prohibition on the use of digital currencies for payments within Russia.
The backdrop to these legislative moves is a broader effort by Russia to mitigate the impact of international sanctions, which have increasingly isolated the country’s financial systems. With traditional banking channels and payment systems under strain, cryptocurrency offers an alternative avenue for facilitating international trade and financial transactions.
President Vladimir Putin, who is expected to sign these bills into law, has been an advocate for exploring digital currencies as a payment mechanism. Earlier this month, he urged the government to seize the opportunity presented by the global expansion of cryptocurrency usage in international settlements. He emphasised the growing global acceptance of cryptocurrencies as a legitimate means of payment in cross-border transactions.
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