Russia introduces a new bill to regulate cryptocurrency mining, setting clear procedures and compliance requirements to bring mining activities out of the shadows and stimulate industry growth.
Points
- The bill sets requirements for individuals and entities engaged in cryptocurrency mining.
- Regulations will be established by the Russian government and the Bank of Russia.
- Only Russian legal entities and registered individual entrepreneurs can mine.
- The bill aims to reduce illegal mining and related offenses.
- Miners must report digital currency transactions and comply with anti-money laundering measures.
Russia is taking significant steps to regulate its burgeoning cryptocurrency mining industry with a new bill introduced by a group of deputies led by Anatoly Aksakov, Chairman of the Duma Committee on Financial Markets. The legislation outlines the procedures and conditions for cryptocurrency mining, aiming to bring clarity and control to this sector.
Key Provisions of the Bill
The bill sets stringent requirements for individuals and legal entities engaged in mining activities. The Russian government, in agreement with the Bank of Russia, will establish regulations for these activities. The Ministry of Digital Development will oversee compliance, and the government can prohibit mining in specific regions.
Control and Compliance
- The bill mandates that only Russian legal entities and individual entrepreneurs listed in the official register can engage in mining activities.
- Russian citizens who are not individual entrepreneurs can mine without registration, provided they do not exceed set energy consumption limits.
- Legal entities and entrepreneurs are prohibited from combining mining with electricity transmission, dispatch management, or electricity trading activities.
Industry Impact and Expert Opinions
Nikita Chaplin, a member of the Budget and Taxes Committee, highlighted that the bill would help reduce illegal mining and related offenses. Proper regulation could stimulate industry development, attract investment, and create jobs. Expert estimates indicate that Russian miners produced approximately 54,000 bitcoins worth over $3.5 billion last year.
Transparency and Anti-Money Laundering Measures
Miners will be required to report the digital currency obtained from mining and provide address-identifiers for transaction records. Rosfinmonitoring, Russia’s financial monitoring service, will maintain a list of address-identifiers suspected of money laundering or terrorist financing.
Sale and Distribution of Mined Cryptocurrency
The bill allows the sale of mined digital currency without using Russian information infrastructure. However, it prohibits the circulation of digital currency within Russia, except for mining and distribution within mining pools. Advertising or offering cryptocurrencies to the public, as well as organizing their issuance and circulation, is banned.
Implementation Timeline
If adopted, the law will come into effect on September 1, 2024. The new regulations are expected to bring significant changes to Russia’s cryptocurrency landscape, promoting legal and controlled mining activities.
Conclusion
Russia’s move to regulate cryptocurrency mining marks a significant shift in its approach to digital currencies. By setting clear procedures and compliance requirements, the new bill aims to bring mining activities out of the shadows, reduce illegal practices, and stimulate industry growth. The regulations will ensure transparency and adherence to anti-money laundering measures, fostering a more secure and controlled environment for cryptocurrency mining.