Russian bill would legalize crypto mining, sales under ‘experimental legal regime’

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A bill was intro­duced into the Russ­ian State Duma, the low­er house of par­lia­ment, on Nov. 17 that would legal­ize cryp­tocur­ren­cy min­ing and the sale of the cryp­tocur­ren­cy mined. Cryp­tocur­ren­cy can­not cur­rent­ly be used for set­tle­ments in Russia. 

The pro­posed law reads, “Dig­i­tal cur­ren­cy obtained as a result of min­ing can be dis­posed of by the per­son who car­ried out the min­ing of this dig­i­tal cur­ren­cy on the con­di­tion that Russ­ian infor­ma­tion infra­struc­ture is not used in con­duct­ing trans­ac­tions with it, with the excep­tion of cas­es of trans­ac­tions car­ried out in accor­dance with the estab­lished exper­i­men­tal legal regime,” as quot­ed by Interfax.

Chair­man of the Duma Finan­cial Mar­kets Com­mit­tee Ana­toly Aksakov told the local press that he expect­ed the bill to pass all three par­lia­men­tary read­ings in Decem­ber to come into force on Feb. 1. Oth­er sources said the bill would become law on Jan. 1. Aksakov said:

“Pas­sage of the law will bring this activ­i­ty into the legal field, and make it pos­si­ble to form a law enforce­ment prac­tice on issues relat­ed to the issuance and cir­cu­la­tion of dig­i­tal currencies.” 

The exper­i­men­tal sales regime is made pos­si­ble by the law on dig­i­tal inno­va­tion passed in 2020. The bill pro­vides def­i­n­i­tions of cryp­tocur­ren­cy min­ing and min­ing pools. It also bans the adver­tis­ing of cryp­tocur­ren­cy in Russia.

A Russ­ian plat­form for cryp­tocur­ren­cy sales will be set up if the law is passed, and Russ­ian min­ers will be able to use for­eign plat­forms. In the lat­ter case, Russ­ian cur­ren­cy con­trols and reg­u­la­tions would not apply to the trans­ac­tions, but they would have to be report­ed to the Russ­ian tax ser­vice. There is cur­rent­ly no leg­is­la­tion on the tax­a­tion of min­ing activ­i­ties, although cryp­to min­ing is wide­spread in Russia. 

Relat­ed: What the Rus­sia-Ukraine war has revealed about crypto

A report issued by the Cen­tral Bank of Rus­sia on Nov. 7 indi­cat­ed that the coun­try was prepar­ing for the intro­duc­tion of dig­i­tal assets onto its mar­kets. The Moscow Exchange draft­ed a bill on behalf of the Cen­tral Bank to allow trad­ing in dig­i­tal finan­cial assets in Sep­tem­ber. Izves­tia news­pa­per report­ed Nov. 18 that major Russ­ian bro­ker­ages and the exchange were prepar­ing for the entry of retail investors onto the market. 

A Russ­ian pol­i­cy on the use of cryp­to in cross-bor­der pay­ments was for­mu­lat­ed in Sep­tem­ber. In addi­tion to nation­al leg­is­la­tion, Russ­ian cryp­to min­ers and oth­er users also have to nav­i­gate inter­na­tion­al sanc­tions.

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