A new bill submitted to Russia’s State Duma would give crypto miners in the country two new ways to sell their coins. However, the proposal faces stiff competition from a government and financial system that remains hostile to the adoption of digital assets.
Trading, mining, or even using cryptocurrency in Russia has, historically, not been easy. The Bank of Russia has made its skepticism about such assets abundantly clear, citing concerns over financial stability and even calling for a total ban on trading and mining. It did however state earlier this year that it might be willing to allow the use of crypto for cross-border payments.
Not only that, earlier this month, the EU confirmed a block on providing crypto-related services to Russian citizens as part of ongoing sanctions in the wake of Russia’s invasion of Ukraine.
However, should this new bill be successful, Russian miners would be permitted to sell mined crypto via foreign platforms and in Russia under the law on experimental digital regimes. This new law comes into effect in January 2023.
Regardless of where they sell their crypto, all profits would still have to be reported to the Federal Tax Office.
The bill contains a number of stipulations and specific definitions, including a detailed description of what digital currency mining actually entails. In this instance, it’s defined as “activities to conduct mathematical calculations by operating computing devices and software and hardware to make entries in an information system that uses distributed ledger technology with the purpose of creating a digital currency and/or receiving remuneration in digital currency.”
It then goes on to specify that the country’s government will take responsibility for defining what requirements crypto miners must meet, and specifies that anybody looking to “dispose of” their coins can do so, provided they don’t use “Russian information infrastructure” to conduct transactions.
Interestingly, the bill also proposes a blanket ban on advertising digital currencies, however, it makes an exception for digital currency mining.
“The introduction of the mining regulation proposed by the bill, as well as the establishment of certain requirements for this activity, will make it possible to legally conduct this activity, declare earned income, as well as pay the appropriate taxes to budgets at all levels,” said Financial Market Committee Chairman Anatoly Aksakov in a statement.
“In addition, this will make it possible to eliminate the legal risks associated with this activity.”
The proposed bill is far from home and dry
Lawmakers behind the bill could face an uphill struggle to get it passed if recent form is anything to go by.
Just last month, a crypto mining bill that would have paved the way for a Russia-wide regulatory framework was rejected by the Russian Parliament and drew criticism from the Financial Market Committee.
This was due in part to the fact that the proposal didn’t specify how fees should be applied and promoted the use of cryptocurrencies as payment. This is outlawed by the Russian Constitution that states the ruble should be the only currency used in the country.