Russia State Duma, that is the lower house of the Federal Assembly of Russia, has given the nod to a bill that seeks to legalize crypto payments and Bitcoin mining. As per state media report, the bill which scaled first reading, hopes to eliminate illegal activities.
Key Provisions of The Russia Bitcoin Mining Bill
The Bill came into light through deputies led by the Duma Committee Chairman on Financial Markets, Anatoly Aksakov. It lists well defined legislation for interested Bitcoin miners and mining. Aside from ending illegal mining, the bill will attract investment and create jobs for the country’s population.
Nikita Chaplin, a member of the Budget and Taxes Committee, commenting on the bill maintained that the letters of the legislation, with its stated requirements and controls, makes it difficult to bypass the law or use Bitcoin in Russia in illegal transactions. Chaplin says available data showed in 2023, over $3.5 billion or about 54,000 Bitcoin units were mined.
Meanwhile, the draft law stipulates that the Russian government in collaboration with the Bank of Russia, will set the necessary requirements. These include the legal entities qualified to engage in digital currency mining and mining pool participants.
Notably, only individual entrepreneurs and Russian legal entities that are duly registered will have the regulatory approval to mine in the country. However, Russian citizens that do not qualify as individual entrepreneurs and not captured in the register can also mine based on set conditions.Â
That is, they must not consume energy beyond the limit established by the Cabinet of Ministers of the Russian Federation. Energy consumption has always been an issue with countries like El Salvador relying on geothermal energy.
Regulatory Measures to Combat Illicit Activities
The monitoring and supervision of these rules falls under the jurisdiction of the Ministry of Digital Development. To guarantee compliance, the government can impose a ban on mining activities in individual regions or in their individual territories.
The draft law forbids legal entities and individual entrepreneurs from integrating electricity transmission. This extends to purchase or sales of electricity with digital currency mining. Furthermore, to curb terrorist financing and money laundering, the Federal Service for Financial Monitoring (Rosfinmonitoring) will track and compile crypto addresses that look suspicious and act on them.
Interestingly, besides mining, digital currency circulation within Russia is forbidden. This also include advertising crypto assets to members of the public or engaging in promotion of digital currency related services. If the bill gets signed into law, implementation will commence on September 1, 2024.
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