New Russian Finance Ministry’s Bitcoin Mining Regulation Vision
Russia is one of the biggest countries involved with Bitcoin right now and the government’s sudden shift from banning Bitcoin to regulating it is now slowly coming to fruition.
Bitcoin Mining Regulation in Russia: The Russian Finance Ministry’s Vision
The Ministry of Finance of the Russian Federation will regulate and tax cryptocurrency mining in the country.
Wallets based on software will only be permitted to store tokens acquired through bitcoin and other cryptocurrencies mining, according to the Russian Ministry of Finance, as reported by Izvestia. These software-based wallets must be used to hold the tokens that are obtained through these wallets. As a result of this development, it is likely that a list of recognized wallet providers, as well as a prohibition on miners using wallets from other countries, will be compiled.
Although the Central Bank has submitted a counter-proposal, the Ministry of Finance is certain that its bill will be adopted by the cabinet. As a result, the bank is arguing for a complete prohibition on mining.
The latter is becoming increasingly implausible, given that Russia is now subject to international sanctions as a result of the Ukraine crisis — even as its cryptocurrency mining industry continues to grow.
If everything goes according to plan, ministry officials expect that the bill will be signed into law on January 1st, 2023, at the earliest.
The definition of “digital mining” and the designation of digital mining as an “enterprise” are two of the most crucial provisions of the bill for miners.
The definition of “digital mining” in the law is present as “the acquisition of the digital currency,” according to the latest version.
If you hear the term “mining pool,” it refers to a collection of equipment that is specially created for mining digital currency.
A distinct section of the bill would be devoted to cryptocurrency mining, according to the ministry. As a result of the bill becoming law, Russian miners will be compelled to perform the following steps:
- Russian miners will be required to register as “individual entrepreneurs,” although they will be excused from this need if they adhere to the government’s predetermined limits on private household energy consumption, which have been created.
- Mining data centers must be owned by a legal business that is recognized in Russia.
- Workers in the mining industry will be required to register with the aforementioned registry, and they will also be required to comply with other aspects of the bill.
In the bill, cryptocurrency mining will be assigned an official OKVED number, which will be important in ensuring its passing. OKVED numbers are used in Russia to categorize and track officially recognized economic activities.
Professionals in the sector were happy with the comment from Izvestia, which stated that “market needs must be met while maintaining balance.”
Vladimir Gorbunov, CEO of the Choise.com crypto ecosystem and the Crypterium crypto wallet provider, claims to have “expertise” in the Federal Tax Service, which he says he has gained through his work with the organization.
Despite this, he asserted that the limitations on exclusions from the company registration would not give adequate computing capacity for bitcoin mining operations. According to Gorbunov, if the law were to be passed in its current form, only legally established enterprises would be able to mine Bitcoin.
Gorbunov also expressed concerns about a few other provisions of the bill, particularly those relating to cryptocurrency exchanges. In addition, it was pointed out to him that the terms “digital currency exchange operator” and “digital trading platform operator” were used interchangeably throughout the law, which “may result in substantial disparities in the future.” It was claimed, according to the ministry, that untrue.
This is interesting news for crypto users in Russia. It will help legitimize Bitcoin and hopefully other digital assets in the future and it will help improve the reputation of cryptocurrencies in the country making them more appealing to the masses in general.
* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.