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Russia’s New Cryptocurrency Regulations: An Overview
In a significant move to regulate the cryptocurrency market, Russia’s State Duma is currently deliberating a bill that aims to impose strict controls over the circulation and mining of digital currencies. This legislative effort comes as part of a broader attempt to oversee a market that has largely been unregulated.
Slated to take effect from September 1, 2024, the proposed law outlines a ban on the general establishment of cryptocurrency circulation, with specific exemptions for registered mining operations and projects sanctioned by the Central Bank of Russia. According to the draft, only Russian companies and individual entrepreneurs who are included in a special registry will be permitted to engage in cryptocurrency mining. Private individuals, however, will be allowed to mine as long as they comply with stringent government energy consumption standards, which could potentially curb their mining endeavors.
Implications for Advertising and Taxation
The bill also seeks to prohibit the advertising of digital currencies and the organization of their circulation. In a notable development for miners, the legislation would mandate them to report the total amount of cryptocurrency mined, as well as the crypto addresses where these assets are stored, to the tax authorities. This measure is intended to prevent the misuse of funds for illicit activities such as money laundering and terrorism financing. Moreover, the government would have the power to ban cryptocurrency mining in certain regions of the country.
Background and Legislative Progress
The push for regulatory clarity gained momentum in the wake of challenges related to international settlements due to sanctions following recent geopolitical events. Although initial proposals to regulate cryptocurrency circulation were blocked by various governmental bodies, the current bill has garnered support and is expected to pass by the end of the State Duma’s spring session.
This legislative initiative is seen as beneficial for electricity providers who have faced difficulties in proving that crypto miners are operating for business purposes. The introduction of a miner registry is anticipated to address these issues. However, restricted access to affordable electricity could potentially drive some miners to cease operations or relocate abroad.
Additional Regulatory Measures
In May, Russian officials announced plans to prosecute private crypto miners who illegally connect to the national power grid. An expert group appointed by the government recommended imposing hefty fines on residential electricity consumers who exceed their allocated usage, with penalties calculated at commercial rates typically reserved for industrial entities.
Despite these stringent measures, a Russian lawmaker clarified in late April that there is no intention to completely ban crypto turnover in the country. This statement came as a response to sensational media reports, underscoring the need for accurate information regarding the nation’s stance on cryptocurrencies.
As Russia continues to refine its approach to cryptocurrency regulation, interested parties are encouraged to stay informed on developments. For more news and updates on this topic, keep visiting Global Crypto News.
