Russia approves proposed legislation on cryptocurrency mining in energy-rich areas
The Russian government has resorted to working on regulatory clarification that will impact the country’s cryptocurrency mining industry, outlining the requirements that operators must comply with.
According to a September 29 article by RBC, the Bank of Russia and the Ministry of Finance are cooperating on the formulation of legislation that would regulate cryptocurrency mining with an emphasis on places where the activity should be permitted.
According to Deputy Finance Minister Alexei Moiseev, if the bill that will be submitted to the State Duma is passed, it will take effect during the fall session.
The legislation specifies that mining should be permitted only in energy-rich areas, while it is prohibited in districts with insufficient power. The regulation is a response to a proposal from the Ministry of Economic Development that advocated allowing cryptocurrency mining in locations with dependable electricity.
Notably, mining will likely be permitted in places with hydroelectric and nuclear power plants where mining farms already exist. The locations where power is inexpensive include Irkutsk and Krasnoyarsk Territory, Tver, Saratov, Smolensk, and Leningrad.
Based on their histories of energy scarcity, Moscow, the Belgorod Region, and the Krasnodar Territory are also likely to prohibit mining.
It is important to note that mining has become a perfect source of revenue as the number of unemployed Russians continues to rise.
The proposed mining regulation adds in part to Russia’s explanation of its crypto stance, with various government institutions holding divergent views on how to effectively handle the industry. In this line, President Vladimir Putin has already pushed the administration and the Central Bank to reach a consensus about cryptocurrencies.
Initially, the Bank of Russia advocated for the outright prohibition of cryptocurrencies, including mining. However, it seems that the government has changed its stance in response to the growing international sanctions imposed following the tragic invasion of Ukraine.