The bill provides a legal definition of mining and mining pools and would create a domestic cryptocurrency market in Russia’s latest step to integrate digital assets into its economy.
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.
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.