The Russian government is going all in on cryptocurrencies. Shortly after announcing the country would regard Bitcoin and other cryptocurrencies as currencies, the country now wants to legalize Bitcoin mining. The Ministry of Economic Development in Russia has proposed the regulation of crypto mining operations in Russia. If this proposal is passed, it will support Bitcoin mining operations in areas with a “sustainable surplus in electricity generation.”
Legalization of Bitcoin mining in Russia
A report from a local news agency said that part of the proposal suggests lowering the fees paid mining firms and data centres to set up their mining operations in Russia. These mining firms and data centres will be set up in specific locations in Russia.
The ministry also added that it would limit power usage by individuals by charging high-energy rates for those who sent more energy. The report adds that the energy threshold will be determined later. By monitoring the energy usage, the ministry notes that there will be enough energy to be used by housing, social facilities, and infrastructure.
The report also said that the ministry would recognize crypto mining as a commercial activity. The government would also derive revenue from the sector by taxing the profits made by crypto mining firms.
After China banned crypto mining, Russia became a major mining hub, with its hash rate growing significantly. Russia is believed to be the third-largest Bitcoin mining country.
Crypto regulations in the country
Russia’s crypto regulatory framework is in an uncertain state. Different government agencies are divided on how to regulate the sector. The Bank of Russia has been calling for a crypto ban due to the increased risk posed to investors.
On the other hand, the Russian finance ministry has advocated for crypto regulations instead of a ban. Last week, the Russian government endorsed crypto regulations, but the governor of the Bank of Russia said that it would continue opposing the use of cryptocurrencies.
Some of the leading government-backed institutions in Russia have supported regulating the cryptocurrency sector. Anatoly Popov, the Deputy Chairman of Sber, one of the leading banks in Russia, said that the financial institution advocated for crypto regulations rather than banning the entire sector.
Popov said that “Our position coincides with the position of the government that cryptocurrencies should be regulated, not banned. Effective regulation is needed that will allow citizens and organizations to legally acquire cryptocurrency, take it into account AML mechanisms and taxation.”
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