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Russia’s Duma has approved a bill to legalise Bitcoin mining and crypto payments. This development shows a change in the country’s stance towards crypto. The measure establishes the framework for a regulated cryptocurrency mining sector in Russia. The step is to attract investments, provide new job opportunities, and limit illicit operations.
Anatoly Aksakov, Chairman of the Duma Committee on Financial Markets, and deputies led this law. It marks a turning point in Russia’s policy towards cryptocurrency. Russia is setting itself up to take advantage of the cryptocurrency industry’s economic potential. Simultaneously, they’re keeping a close eye on it by creating a legal framework for Bitcoin mining and associated operations.
Legal Framework for Bitcoin Mining
The recently passed law establishes stringent regulations for Bitcoin mining in Russia. Strict regulations and oversight systems are the fundamental goal of the law. It seeks to decrease illicit mining and related crimes. A member of the Budget and Taxes Committee, Nikita Chaplin has stressed the need for this rule to prevent illegal transactions using digital currencies. Chaplin also brought attention to the massive scope of Russia’s mining operations. He stated that miners there removed around 54,000 Bitcoins, worth more than $3.5 billion, in only the last year.
Notably, individuals and businesses involved in mining digital currencies must meet specific standards laid out in the proposed legislation. The government and the Bank of Russia will develop these guidelines to provide a balanced strategy that considers economic and monetary policy. Compliance is to be monitored by the Ministry of Digital Development. They are responsible for making sure that all mining operations follow the set regulations.
Crucially, the measure gives the government the leeway to ban cryptocurrency mining in certain areas outright. Issues like energy usage or environmental concerns can be addressed in specific locations. It can be achieved through tailored control methods, which are made possible by this provision.
Only registered legal firms and individual entrepreneurs are permitted to participate in large-scale mining operations. Nonetheless, ordinary persons who aren’t officially business owners are allowed to participate as long as they don’t exceed the energy consumption caps established by the Cabinet of Ministers.
The government will set up a registration of miners to provide openness and oversight. A separate regulatory act will outline the particular procedures for maintaining this registry. The bill also introduces the separation of mining and electricity-related industries. It forbids entrepreneurs and legal entities from merging the two. This division has been put in place to maintain honest competition in the energy market and avoid any conflicts of interest.
Focus on Regulation and Compliance
The new laws are crucial in regulating and ensuring compliance in the cryptocurrency mining sector. The bill requires miners to report their digital currency earnings and transaction identifiers to a government-authorised institution, thus improving industry transparency and traceability.
Beyond these reporting mandates, the measure grants Russia’s financial intelligence branch, Rosfinmonitoring, the authority to establish a registry of questionable Bitcoin addresses. The step aims to bolster AML initiatives and stop terrorists from using cryptocurrency to fund their operations.
The law restricts the circulation of cryptocurrencies within the country. However, it does permit the selling of mined digital currency without using Russian information infrastructure. The measure prohibits digital currency use in Russia except for mining and distribution within mining pools. Public advertising for cryptocurrencies and digital currency-related goods and services is not permitted.
These regulations achieve a balance in promoting a regulated and legitimate digital currency industry. Hence, it protects citizens from the risks of widespread cryptocurrency use. Industry participants will have a lot of time to prepare for the new standards. On September 1, 2024, the new regulatory framework will take effect. This proactive stance shows that Russia is serious about creating a stable and regulated cryptocurrency industry.
Charting a New Course: Russia’s Crypto Future
With this measure, Russia’s Duma has advanced in blockchain and cryptocurrency adoption. Russia is setting itself up to take advantage of the economic prospects given by the fast-changing digital asset landscape. They are achieving this by creating a legal framework for Bitcoin mining and related operations.
The possible advantages of adopting Bitcoin technology are becoming more apparent, and this legislative action reflects that. On the other hand, it shows that they are serious about keeping the regulators in charge. The industry monitors Russia’s new regulatory framework’s effects on local and worldwide cryptocurrency markets. Turkishnyradio continues to provide insights on these developments, helping investors stay informed.
