Russian State Duma Receives Bill to Legalize Crypto Mining and Ban Public Cryptocurrency Trading
A group of lawmakers, including Anatoly Aksakov, Anton Gorelkin, and Andrey Lugovoy, has submitted bill No. 237585-8 to the State Duma. The bill, titled “On Amendments to the Federal Law ‘On Digital Financial Assets, Digital Currency, and Amendments to Certain Legislative Acts of the Russian Federation,’” aims to legalize cryptocurrency mining in Russia.
According to Deputy Gorelkin, who shared details on his Telegram channel, “The bill was developed with input from the Ministry of Finance and the Central Bank. It will finally allow crypto miners to fully legalize their activities. The state will receive tax revenues, and market participants will gain legal guarantees. Additionally, the bill outlines the possibility of digital currency transactions within an experimental legal framework, which could boost the development of Russia’s cryptocurrency infrastructure.”
Key Provisions of the Bill
- Definition of Mining: The bill defines digital currency mining as the activity of performing mathematical calculations using computing devices and software-hardware systems to record entries in an information system based on distributed ledger technology, with the goal of creating digital currency and receiving rewards in digital currency.
- Mining Pools: A mining pool is defined as the combination of computing power from multiple devices owned by different participants, used for mining purposes. The resulting digital currency is distributed among the owners of these devices.
- Creation of Digital Currency in Russia: This refers to actions using Russian information infrastructure and user equipment located in Russia, aimed at generating digital currency.
Regulation of Crypto Sales and Taxation
The lawmakers propose that, starting January 2023, mined cryptocurrency can be sold through foreign systems without adhering to currency regulation laws, or through a special platform to be created in Russia. In both cases, transactions must be reported to the tax authorities, as explained by Anatoly Aksakov, head of the Financial Market Committee and co-author of the bill.
According to the Telegram channel “OrderCom,” the government, in coordination with the Central Bank, will set requirements for miners’ activities, and the Federal Tax Service (FNS) will likely oversee compliance. Digital currency obtained through mining must be sold without using Russian information infrastructure, except for transactions within the experimental legal regime. Another bill is expected to address the development, testing, and implementation of digital innovations in the financial market.
Ban on Public Cryptocurrency Trading and Advertising
Despite the legalization of mining, the bill includes a ban on advertising or publicly offering cryptocurrencies in any form. The director of the blockchain project Indefibank told the BBC Russian Service that this provision could effectively ban cryptocurrency trading, including exchanges and crypto trading platforms.
Staking on an individual basis will be allowed, but organizing staking pools and offering them as a service will not. Direct P2P cryptocurrency exchanges with acquaintances or in private groups are permitted, but public exchange offers are prohibited. As a result, almost all currently operating crypto exchanges would fall under the ban, according to industry publications.
The same restrictions apply to any other services related to cryptocurrencies: private use is allowed, but offering them as commercial products or services is not.
Future Outlook
Deputy Gorelkin stated, “We expect that with the adoption of this bill, a law enforcement practice will begin to form, which will determine the direction of further comprehensive regulation of issues related to the issuance and circulation of digital currencies. However, it is already clear that the main priorities should be the development of blockchain technologies and the protection of citizens’ rights who use them.”
In January, as reported by “Mediazona,” the Central Bank proposed a complete ban on financial operations with cryptocurrencies in the Russian market. However, after the start of the “special operation” in Ukraine and the tightening of sanctions, the Central Bank changed its stance and, together with the Ministry of Digital Development, began considering the legalization of international settlements in cryptocurrencies.