Russia is planning to tighten control over cryptocurrencies with a new regulatory bill aimed at bringing a largely unregulated market under government oversight.
The State Duma, Russia‘s lower house of parliament, is currently discussing a bill to regulate cryptocurrencies. The proposed law includes a comprehensive ban on the circulation of cryptocurrencies starting September 1, 2024, with exceptions for officially registered miners and projects approved by Russia’s central bank.
According to the proposal, only Russian companies and individual entrepreneurs listed in a special registry will be allowed to mine cryptocurrency. Private individuals can mine cryptocurrencies without being on the registry, provided they follow government energy consumption regulations, which may discourage some from mining.
The bill also prohibits advertising digital currencies and organizing their circulation.
Under the new law, Russian miners will be required to report the total amount of cryptocurrency they have mined and the crypto addresses where the mined funds are held to the tax office.
Legislators argue that this measure is intended to prevent the use of these funds for “money laundering, financing of terrorism, or other criminal activities.” Authorities will also have the power to ban cryptocurrency mining in certain regions.
In summer 2023, Russia’s Ministry of Finance suggested banning the organization of cryptocurrency circulation, except for stablecoins and the sale of coins by miners. However, the proposal was blocked by Russia’s secret service FSB and the investigative committee.
The current bill has been in the State Duma for some time but was not a priority. Now, Russian authorities are accelerating the bill to control crypto transactions due to issues with international settlements caused by sanctions following the war in Ukraine.
The Ministry of Finance, the central bank, and the financial monitoring service all expect the law to pass by the end of the State Duma’s spring session.
The bill is seen as good news for electricity companies, which have struggled to prove that Russia-based crypto miners use electricity for commercial purposes. The introduction of a crypto miner registry is expected to address this issue. However, the lack of access to cheap power might push some miners out of business or to relocate.
Earlier in May, Russian authorities announced plans to prosecute private crypto miners who illegally connect to the national grid. A government-appointed expert group proposed hefty fines for residential electricity users who exceed their allowed consumption.
Authorities are considering measures to crack down on crypto miners using residential homes to reduce power disruptions in specific areas. Penalties will be calculated using commercial rates typically applied to industrial enterprises.
Meanwhile, on April 27, a Russian lawmaker clarified that the country is not planning to ban crypto transactions altogether, criticizing media outlets for sensationalizing the issue instead of verifying facts.
Summary Review: Russia is taking significant steps to regulate the cryptocurrency market with a new bill that aims to control mining and circulation. The proposed regulations will impose strict requirements on miners and prohibit the advertisement and organization of cryptocurrency activities. While the bill seeks to curb illegal activities and ensure better control over crypto transactions, it also poses challenges for miners who might face increased costs and regulatory hurdles. As Russian authorities push for this legislation in response to international sanctions, the outcome will have a notable impact on the future of cryptocurrency operations within the country.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
