Russian Ministry Suggests Legalizing Bitcoin Mining

The Russian Ministry of Economic Development has proposed crypto mining in some specific areas. The idea is to classify cryptocurrency mining as a business activity and enforce taxes on the income generated by the industry. The Russian government is working on developing a legal framework for digital assets. On the other hand, a federal ministry has presented another proposal related to the cryptocurrency mining market.

According to local news agency Izvestia, Russia’s Ministry of Economic Development has approved the idea of crypto mining legislation in the nation. The proposal recommends enabling mining operations in locations with sustainable excess in power production. Moreover, the Ministry’s plan includes cheaper taxes and lower energy costs to establish mining farms and data centers in selected Russian regions.

In light of this, the Ministry wants to set a cap on the amount of electricity people can use for mining. Accordingly, it proposes to raise energy prices for those who use more. However, the authority has yet to define a threshold quantity for such an action. Furthermore, ministry officials said the new proposed guidelines would eliminate the potential of power shortages in other sections of the nation. These other sections include housing, social services, and infrastructure.

On the other hand, the Ministry of Finance report also recommends taxing Bitcoin mining income as a business activity. There have been continuous discussions with various government factions about cryptocurrency legislation in Russia. However, the current proposal seems to be a positive step forward for Bitcoin.

The Different Points of Views Regarding The Crypto Regulation

Let’s look into an illustration of this. Russia’s Finance Ministry has advocated for regulating the crypto business. However, Russia’s Central Bank has been vigorously pressing to prohibit crypto transactions. The main reason against crypto transactions has to do with investor protection issues. In addition, Elvira Nabiullina, governor of the Russian Central Bank, said that the bank does not accept the government’s decision, which was officially authorized on February 8. According to Nabiullina, the bank would continue to oppose crypto adoption in Russia.  Correspondingly, some news stated that the government and the central bank would present a combined crypto regulatory law by this Friday.

Lately, the concept of regulating cryptocurrency in Russia has gained backing from some of the largest state-owned financial institutions. For example, Anatoly Popov, deputy chairman of the executive board of Russia’s bank Sber, has expressed support towards crypto mining. However, he emphasizes their focus should be towards regulating the business rather than prohibiting the activity. 

According to Popov, effective legislation is the first requirement so people and companies will be able to lawfully buy cryptocurrencies. Also, through this step, they would consider anti-money laundering (AML) measures and taxes.