KEYTAKEAWAYS
- Russia legalizes crypto mining for registered national companies and entrepreneurs.
- The central bank gains authority to oversee cross-border crypto payments.
CONTENT
The State Duma passes two significant cryptocurrency-related laws, legalizing mining operations and granting the Russian central bank authority over crypto-based cross-border payments in an experimental regime.
In a significant move for the cryptocurrency industry, Russia’s State Duma has approved two landmark laws related to digital assets. The first law legalizes cryptocurrency mining, while the second establishes an experimental regime granting the Russian central bank authority over cross-border payments using cryptocurrencies.
>> Also read: Russia Legalizes Crypto for Cross-Border Payments
The mining law, set to take effect on November 1, 2023, allows national companies and individual entrepreneurs registered with the Ministry of Digital Development to engage in crypto mining activities. Unregistered entities can still operate mining rigs, provided they do not exceed region-specific energy consumption limits.
The Bank of Russia, in conjunction with the cabinet of ministers, will oversee mining activities and set requirements for mining companies. Participants in mining pool operations will undergo vetting by the central government and the Bank of Russia.
The experimental regime, commencing September 1, empowers the Bank of Russia to authorize companies for cross-border payments and exchange trading with cryptocurrencies. This initiative includes three experiments: using cryptocurrency for foreign trade settlements, exchange trading in cryptocurrency, and creating an electronic platform for cryptocurrency operations based on the National Payment System (NPS).
While these laws represent a step towards cryptocurrency adoption, they come with significant restrictions. State authorities retain the power to ban or restrict cryptocurrency transactions, and advertising digital currencies remains prohibited in Russia.
The move comes in the wake of international sanctions following Russia’s invasion of Ukraine, which cut off the country from various online services and financial systems. Cryptocurrencies potentially offer an alternative financial avenue, albeit under strict government control.
The Bank of Russia will monitor digital asset payment providers to identify security risks and assess potential money laundering and terrorist financing activities. This regulatory approach may prompt other jurisdictions to develop similar frameworks for the cryptocurrency industry.
These new laws highlight Russia’s complex relationship with cryptocurrencies, balancing potential economic benefits with the government’s desire for control over financial transactions.
>> Also read:
- Global Crypto Regulation Guide H1 2024: EU, Japan, Singapore, UAE, and Hong Kong Updates
- 2024 U.S. Crypto Regulation and Market Impact Analysis
