Russian Ministry wants to legalize Bitcoin mining in specific areas

Published at: Feb. 15, 2022

Amid the Russian government continuing working hard to come up with cryptocurrency regulations, a federal ministry has made another proposal regarding the crypto mining industry.

Russia’s Ministry of Economic Development has greenlighted the concept of crypto mining regulation in the country, proposing to allow mining operations in areas with “sustainable surplus in electricity generation,” local news agency Izvestia reported Tuesday.

As part of the proposal, the ministry suggested introducing lower fees for setting up mining farms and data centers in specific Russia’s areas as well as offering reduced energy rates for such facilities.

The ministry also wants to establish a power use limit for mining by individuals, reportedly proposing to introduce higher energy rates for increased energy spending. The authority is yet to determine a threshold amount for this, the report notes.

According to the ministry, the newly proposed rules would remove the risks of insufficient power supply for housing, social facilities and infrastructure in other regions of the country.

Additionally, the ministry reportedly proposed recognizing crypto mining as a commercial activity and introducing taxes on realized profits from cryptocurrency mining.

The ministry did not immediately respond to Cointelegraph’s request for comment. This article will be updated pending new information.

Related: Russian region struggles to keep up with Bitcoin mining energy demands

The latest proposal comes amid the ongoing uncertainty over crypto regulation in Russia, with different parts of the government still arguing on how to regulate Bitcoin (BTC).

As previously reported, Russia’s finance ministry has been advocating for regulating the crypto industry, while the Russian central bank has been aggressively insisting to ban crypto transactions, citing investor protection risks. As the government formally approved the concept of crypto regulation on Feb. 8, Bank of Russia’s governor Elvira Nabiullina subsequently declared that the bank did not support the state’s decision and will continue to oppose crypto adoption in Russia.

The government and the central bank reportedly expected to introduce a joint crypto regulation bill by this Friday.

Related: Russian central bank registers nation’s first digital asset manager

Some major state-backed financial institutions in Russia have supported the idea of regulating crypto in the country recently. Anatoly Popov, deputy chairman of the executive board at Russia’s banking giant Sber, reportedly voiced the company’s support of regulating the industry rather than banning it.

“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,” he said.

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