Russia has just made a major breakthrough in digital asset mining. President Vladimir Putin has signed a bill that officially legalizes cryptocurrency mining. The signed bill also covers mining pool, mining infrastructure operator, address identifier, and the individual who organizes mining pool activities.
Mining is considered a component of turnover meaning that the revenue generated from these activities would included in the overall revenue or income of a business. This becomes subject to taxation, similar to other business activities. Secondly, mining is a business activity rather than the issuance of cryptocurrency. Individuals who do not exceed the energy consumption limit set by the government can mine without registration.
Recognising crypto’s economic prospects, Putin made a clarion call “to seize the moment” and establish a legal framework and regulations. He also urged Russian entities and entrepreneurs to develop infrastructure, and create conditions for the circulation of digital assets.
The law will be enforced ten days after the date of its official publication, providing further flexibility to set an effective date to specific parts of the law based on their nature and requirements.
As per reports, Russia might used it for cross-border transactions amidst increasing Western sanctions. Spearheaded by the Ministry of Finance and the Bank of Russia, the initiative reflects a significant shift in the country’s approach to digital assets.
Russia’s Strategic Crypto Move
Previously, Russia maintained a conservative stance on cryptocurrency. However, the evolving geopolitical crisis with Ukraine and the imposition of heavy sanctions, compelled a reevaluation of this policy.
Deputy Finance Minister Alexei Moiseev has underscored the importance of establishing a legal framework for crypto transactions. One that comply with Anti-Money Laundering [AML] and Know Your Customer [KYC] regulations, benefiting many Russians who are currently forced to rely on foreign platforms for crypto services.
This move has secured key support from high-ranking Russian officials, including the State Duma, which has been advocating for allowing miners to sell cryptocurrency as an export product. Futhermore, the authorities are also considering imposing a 20% income tax on cryptocurrency miners to bolster the national budget and tap the burgeoning crypto market to contribute to the country’s economy.
