On Tuesday, the Russian government enacted two laws that officially sanction the mining of virtual currency and open the door for the country’s central bank to utilize cryptocurrency for cross-border transactions.
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The State Duma, the lower chamber of the Russian parliament, has given the green light for legal entities and entrepreneurs to engage in crypto mining. Those wishing to participate must provide their details to the relevant Russian authorities for monitoring, as stipulated by the new regulations.
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Individuals who adhere to the energy consumption limits set by the government are permitted to mine without having to register. Additionally, the government will have the authority to prohibit mining activities in specific regions of Russia.
Miners are mandated by law to disclose their operations to the local financial monitoring service and share their wallet addresses with Russia’s security agencies.
A distinct cryptocurrency bill, set to be enacted in September, will grant Russia’s central bank the authority to establish an experimental framework for utilizing cryptocurrencies in international transactions. Presently, the utilization of digital currency for payments is forbidden within Russia.
The updated cryptocurrency legislation is being implemented amidst ongoing global sanctions against Moscow due to its incursion into Ukraine, which are adversely impacting Russia’s economy. These sanctions have cut off Russian firms from the international dollar system and compelled the Moscow Exchange to cease trading in U.S. dollars and Euros.
Anton Gorelkin, a key figure in the development of the crypto bill, emphasized that Russian authorities perceive cryptocurrencies as a means to bypass sanctions. This perspective sheds light on the strategic approach taken by policymakers in response to the evolving landscape of digital assets.
The shifting stance of Russia towards cryptocurrencies was underscored by President Vladimir Putin’s recent acknowledgment of their potential as a dynamic and promising sector within the modern economy. This recognition signifies a departure from previous skepticism towards digital currencies.
President Putin’s call for the establishment of a robust legal framework, regulatory measures, and infrastructure for digital assets reflects a proactive approach towards embracing the opportunities presented by cryptocurrencies. By fostering an environment conducive to the circulation of digital assets, Russia aims to position itself favorably in both domestic and international markets.
The growth of the local crypto industry continues to be hindered by various restrictions. Despite the introduction of a new law, the ban on cryptocurrency payments within Russia will remain in place. Furthermore, advertising for cryptocurrencies and related services is still not allowed in the country.
Recently, President Putin pointed fingers at crypto miners for the electricity shortage in Buryatia and the Irkutsk region. In response to this issue, Russia’s Ministry of Energy suggested a significant increase in tariffs for miners, ranging from five to ten times the current rates, in order to prevent an energy deficit.
The challenges faced by the crypto industry in Russia are multifaceted, with restrictions on payments and advertising posing significant obstacles to its development. The government’s efforts to address issues such as electricity shortages by proposing higher tariffs for miners reflect the complex dynamics at play in the country’s evolving crypto landscape.
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