In an effort to curb illegal mining and the crimes it spawns, the Russian Duma has approved a bill legalizing Bitcoin mining and cryptocurrency payments. It opens the door for Russian companies and individuals to mine under certain energy restrictions.
The Bitcoin Mining Legislation in Russia’s Parliament
A thorough set of criteria for Bitcoin mining has been introduced as a result of an effort that was pushed by Anatoly Aksakov and his deputy group in the Parliamentary Committee on Financial Markets. The Russian news agency RIA Novosti has claimed that these steps are intended to strengthen controls and put a stop to illicit mining activities and the crimes that are related to them.
Nikita Chaplin, a member of the Committee on Budget and Taxes, stressed that the legislation would increase the level of scrutiny that is placed on digital currencies, which will make it more difficult to engage in illegal operations. He brought attention to the fact that miners produced around 54,000 Bitcoins with a value of more than $3.5 billion in the previous year.
At the same time, the proposed legislation lays forth stringent requirements for both private persons and business organizations that are engaged in the mining of digital currencies simultaneously. The government will develop these standards in collaboration with the Bank of Russia, and the Ministry of Digital Development will be responsible for providing monitoring to guarantee that the regulations that have been set are adhered to.
Additionally, the law allows for the possibility of prohibiting cryptocurrency mining in particular places if it is determined that such a restriction is required. However, residents who are not entrepreneurs will be able to participate in mining activities without having to register as long as they stick to the energy consumption restrictions that have been established by the Cabinet of Ministers. Mining operations will only be authorized to be engaged by legally registered businesses and individual mining entrepreneurs.
Detailed processes for the upkeep of this register are going to be described in a regulatory decree that will be issued by the government soon. Additionally, to avoid any conflicts of interest and to ensure that the energy industry is conducted fairly, the Act makes it illegal for legal companies and business owners to combine mining operations with activities linked to electricity.
Navigating Regulatory Requirements with a Focus on Compliance
Digital currency purchases and transaction IDs must be disclosed by miners to an authorized government organization under the legislation. To combat money laundering and the funding of terrorism, Rosfinmonitoring will use this data to keep tabs on transactions and compile a list of questionable Bitcoin addresses.
Furthermore, the measure allows for the export of digital currency that has been mined outside of Russia’s information infrastructure, but it limits its use within Russia to mining and pool distribution only. Also forbidden are any public promotions or advertisements for cryptocurrencies or any goods or services associated with the creation of digital money.
This law represents a significant shift in Russia’s stance towards cryptocurrencies; it is scheduled to be implemented on September 1, 2024, and its goal is to promote a regulated and legitimate market for digital currencies.
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