Elation for the Cryptoverse! The Russian government is mulling crypto law regulations. The Bank of Russia (BoR) had earlier called for banning cryptocurrencies citing probable “destabilizing effect” on the Russian economy. The BoR still maintains its cautionary regulatory stance on cryptocurrency, BoR’s Governor Elvira Nabiullina clarified on February 8, 2022. But, the Russian government has now announced draft legislation recognizing cryptocurrency as “an analogue of currencies,” Kommersant reports.
President Vladimir Putin discussed harnessing the “competitive advantages” of Russia’s mining industry in January 2022 via a consensus-building event. The reason is that Russia’s electricity surplus ranks 3rd globally in bitcoin mining. So, Russia’s Ministry of Economic Development (MED) has approved cryptocurrency mining in areas with a “sustainable surplus in electricity generation,” Izvestia reports.
The MEDs proposal suggests reducing fees for developing crypto mining facilities plus data centers in promising regions. On offer also would be decreased energy rates for the mining facilities. These perks would also carry with them appropriate power usage caps for individual miners, the proposal states. The ministry clarifies that the new rules would reduce the risks of low power supply to households and social infrastructure facilities in Russia. The Russian MED intends to categorize crypto mining as a commercial activity, realized profits from which would attract taxes.
A joint cryptocurrency regulation bill is anticipated to be tabled by the government and the BoR soon. The government of Russia has clarified that cryptocurrency would be treated as a foreign currency, and not as a retail payment medium. The proposed cryptocurrency regulation draft would regulate the market conduct of “cryptocurrency providers” for investor protection. The said “cryptocurrency providers” would be duly regulated via licensing, capital, and liquidity maintenance requirements. Identity verification and anti-money laundering (AML) stipulations would also have to be complied with by the Russian “cryptocurrency providers.”