Russian President Vladimir Putin signed a law on Thursday to legalize cryptocurrencies in Russia. The bill will allow registered Russian entrepreneurs to mine cryptocurrencies. Let’s see who will be allowed to mine cryptocurrencies and where to sell them.
Legalization of cryptocurrency mining
The BRICS have started embracing digital assets in recent months. Some reports even suggest that they are considering creating a native cryptocurrency. This could be a way to further move away from the US dollar. In the midst of all this, the Russian Parliament has legalized cryptocurrency mining.
According to the new law, not everyone is allowed to participate in mining activity. Only Russian legal entities and registered individual entrepreneurs are allowed. Other people can also start mining cryptocurrencies without even registering in Russian registries, but they cannot exceed the energy consumption limit set by the Russian government.
This cryptocurrency mining rule also introduces the concepts of mining pools, mining infrastructure, address identifier, and pool master in Russia. Mining is not recognized as an issuance of digital currency but as a component of turnover. Mined cryptocurrency and foreign digital assets can be traded on the Russian blockchain platform. However, the Central Bank of Russia can ban certain assets if they pose a threat to Russian financial stability.
The Russian Government and Cryptocurrency
Russia has suffered heavy losses in its international trade due to Western sanctions. At the end of July, the Russian parliament adopted a bill aimed at using cryptocurrencies as a means of transaction for cross-border exchanges. Today, the adoption of the bill on cryptocurrency mining brings Russia closer to the widespread use of cryptocurrencies. This law will come into force within ten days of its publication. According to a report by the Russian News Agency, Putin, during an economic meeting with the government, discussed the introduction and use of cryptocurrencies.
Looking to the future
Although Russia has passed pro-cryptocurrency laws to allow registered entities to mine cryptocurrencies and has allowed some companies to use crypto transactions for international trade, domestic use of cryptocurrencies is still prohibited. The new cryptocurrency laws could be a way for them to open new avenues of trade with trading partner countries and create new connections, but it puts Russia and its partners in the bad eye of Western regulations. It will be interesting to see what steps they will take once these laws come into effect in Russia.
Also learn how laws and regulations affecting blockchain technology and cryptocurrencies, like Bitcoin, may impact its adoption.
