Leaders from the Russian cryptocurrency industry have collaborated with executives from various businesses to formulate proposed legislation that aims to legitimize the rapidly growing mining industry in the country.
During a crypto-related event on March 22, Alexander Brazhnikov, the Executive Director of the Russian Association of Cryptocurrency and Blockchain (RACIB), discussed the bill as reported by ComNews.
Russian Crypto Industry: Time to Legalize Mining
According to Brazhnikov, RACIB has taken action by sending letters to government ministries, suggesting the advancement of the cryptocurrency economy and mining activities within Russia.
The head of the sector reported that the organization had submitted preliminary regulatory suggestions to both the Ministry of Energy and the Ministry of Economic Development.
Additionally, Brazhnikov mentioned his intention to forward the preliminary legislation to Rosfinmonitoring, the government agency responsible for combating financial crimes such as money laundering.
The head of RACIB mentioned that the Ministry of Finance will also be asked to review the suggestions.
Industry leaders are optimistic about a potential breakthrough following extensive discussions and appeals to Moscow to legalize their business activities.
Nevertheless, there is optimism that this new attempt may prove successful despite past failures. The RACIB legislation has received backing from members of the State Duma including Anton Tkachev, Vladimir Plyakin, Grigory Shilkin, and Sardana Avksentyeva.
According to the bill, Russian citizens are showing a growing interest in cryptocurrency with over 12 million cryptocurrency wallets being opened, as stated by experts.
Russians Turn to Crypto?
According to RACIB, Russians are currently storing a collective sum of $108 billion in cryptocurrency within their digital wallets.
The country was depicted as one of the leading nations globally in terms of its mining capabilities.
In comparison, the authors of the bill pointed out that every crypto transaction takes place within an unregulated grey area.
Engaging in lawful business activities involving cryptocurrency could lead to facing charges of criminal prosecution.
In 2022, miners made an unsuccessful attempt to gain support from Moscow. A bill was presented in the Duma, but it was ultimately dropped following the initial reading.
Not backing down, RACIB is determined to give it another shot. They formed a task force on November 20, 2023, to develop a comprehensive policy for crypto mining operations.
The team consisted of government officials and individuals with expertise in the energy sector.
Experienced individuals from the Russian mining sector were also part of the working group.
A bill was created by the identical group and was initially presented on March 4, 2024. It was then delivered to Maxim Reshetnikov, the Minister of Economic Development of the Russian Federation.
Miners have expressed their willingness to enhance the agreement with Moscow by offering government officials access to their recently established data centres, as reported earlier.
Miners believe that establishing these centres could result in a cost savings of $32.4 million for government officials in their efforts to implement new technology projects.
Top rewrite: Leaders in the business sector have announced their readiness to commit $4 billion towards the establishment of versatile data hubs.
Companies Ready to Invest?
Companies such as BitRiver are investing in the construction of costly new facilities in the southern region of Russia.
The main objective of the miners is to obtain official recognition for mining as a legitimate economic activity.
Taxing crypto miners in Russia could lead to a more secure environment for businesses looking to grow within the country.
Moscow is being urged by the Russian cryptocurrency sector to establish a legal sandbox for centralized conversion of digital assets from mining activities.
It seems that certain legislators are still interested in establishing a government-operated cryptocurrency exchange specifically for miners.
There is a desire for the exchange to cater to Russian businesses that utilize cryptocurrency as a means of payment for international trade transactions.
Is CBDC a Stumbling Block?
According to Elena Savina, an independent financial advisor, the media outlet reported that there was a possibility that the bill may not be heard.
Frequently asked questions:
Why was the draft bill suggested by the Russian crypto industry?
The proposed legislation seeks to bring the thriving mining industry in Russia under legal oversight, establishing guidelines for how the cryptocurrency sector can operate within the nation.
From whose initiative did the idea for this bill originate?
RACIB, along with key players in the field, took the lead in developing the initial legislation on cryptocurrency and blockchain technology.
Which governmental organizations have been presented with suggestions on the proposed legislation?
RACIB has submitted draft regulation proposals to the Ministry of Energy, the Ministry of Economic Development, and Rosfinmonitoring, the country’s anti-money laundering agency.
What makes the legalization of cryptocurrency mining so important for the crypto sector in Russia?
Legalizing crypto mining would establish credibility and transparency for the industry, offering clear guidelines on regulations and shielding legitimate business activities from possible criminal charges.
What measures does the new bill plan to implement to clarify the ambiguous regulations concerning cryptocurrency transactions?
The legislation is designed to oversee every cryptocurrency transaction, to push them out of the unmonitored grey area and into a legally compliant space, ultimately minimizing the risks involved.
Has Russia made any legislative attempts in the past to regulate cryptocurrency mining?
Indeed, there were previous endeavours, one of which was a bill introduced to the State Duma in 2022; however, it was ultimately discarded following the initial reading.
How have prominent figures in the industry worked towards promoting the legalization of crypto mining?
Business moguls have collaborated in task forces and communicated with governmental authorities to create detailed suggestions and push for the acknowledgement of mining as a valid source of economic growth.
What strategies are crypto mining companies using to gain government support for their operations?
To highlight the economic advantages of legalizing and supporting the mining industry, companies are providing benefits such as reduced expenses for tech projects and significant funding for new data facilities.
How does the Russian crypto industry plan to further improve its operations aside from seeking legalization?
The industry is suggesting the implementation of a legal sandbox for converting digital assets acquired through mining, showing potential interest in starting a government-controlled crypto exchange alongside legalization.
What difficulties or hurdles could impede the progress of this bill?
Even with industry initiatives, questions linger about government backing for the bill, as variables like the emergence of central bank digital currencies might sway legislative choices.
