Russian Crypto Industry Submits Proposed Mining Legislation to Government

Russian crypto industry leaders have collaborated with business figures to create a draft bill that could legalize the mining sector in the nation. The Executive Director of the Russian Association of Cryptocurrency and Blockchain (RACIB), Alexander Brazhnikov, discussed the bill at a crypto-related event in March 2024. He mentioned that they had been in discussions with regulators and had decided to propose their ideas for the formation of a bill on mining in Russia. RACIB had sent draft regulation proposals to various ministries and agencies, seeking to develop the cryptocurrency economy and mining in Russia. The bill has already gained the support of several State Duma lawmakers, indicating a positive outlook for its potential success.

According to RACIB, Russians are currently holding around $108 billion worth of coins in crypto wallets, making the nation one of the world leaders in mining capacity. However, all crypto transactions in Russia are carried out in an unregulated zone, posing a risk of criminal prosecution for those engaging in legitimate business operations with crypto. Previous attempts by miners to gain legalization for their operations failed, but the industry remains hopeful that the new bill proposed by RACIB could bring about positive changes. The bill emphasizes the importance of legitimizing mining as a form of economic activity, potentially leading to taxation of crypto miners and ensuring a safe and viable future for companies expanding their operations in the country.

Mining firms such as BitRiver are already investing in new facilities in Russia to secure an official classification for mining as a form of economic activity. This move could lead to the taxation of crypto miners by the Russian state, while also providing a secure future for companies looking to expand in the country. Industry leaders are also advocating for the creation of an experimental legal sandbox for the centralized conversion of digital assets obtained through mining, suggesting a possible state-run crypto exchange for miners. Some lawmakers are interested in creating an exchange to facilitate Russian firms using crypto as a payment tool in cross-border trade.

Despite the efforts to legalize the mining sector in Russia, there are concerns that the bill could face challenges, especially with Moscow fast-tracking its CBDC (Central Bank Digital Currency) project. The focus on developing operations with the digital ruble may lead to reluctance in legitimizing the crypto sector through the proposed bill. However, industry leaders remain optimistic about the prospects for legalization, highlighting the potential benefits for the crypto mining sector in Russia. It is essential for stakeholders to navigate the evolving regulatory landscape and address concerns related to government initiatives to ensure the success of the proposed bill and the future of the crypto industry in the country.