Russia has introduced a measure to regulate and legalise cryptocurrency mining inside the country, marking the nation’s entry into the cryptocurrency market.
The State Duma, the lower house of parliament, is now reviewing a law that aims to find a middle ground between promoting this emerging business and reducing associated dangers.
Deputy chairman of the State Duma Committee on Information Policy Anton Gorelkin is spearheading the effort to include a licensing mechanism for cryptocurrency miners in the draft bill. There would be more responsibility and monitoring as only registered enterprises and individual entrepreneurs may mine.
Hobbyist miners would still be able to operate without a licence under the law, so long as their energy usage stays below an unspecified level.
This multi-tiered strategy is a practical acknowledgement of the crypto mining environment in Russia right now. Individual miners who use very little energy are less of a threat than large-scale mining operations, which need regulation.
Anti-money laundering (AML) is the main focus of the legislation. The decentralized structure of cryptocurrencies makes them appealing to criminals. In order to prevent this, miners would have to disclose their actions to official entities, including the addresses of their identifiers and the digital money they have acquired.
The Russian financial intelligence agency Rosfinmonitoring would have access to this data and may use it to keep an eye out for questionable activities.
Another important part of the law is the ability to sell cryptocurrency that has been mined. The specifics are still sketchy, but the prospect of selling on international platforms raises the prospect of restrictions on crypto trading inside the country. This may be an effort to gain more influence in Russia’s budding cryptocurrency sector.
Gorelkin makes an intriguing point by highlighting the significance of crypto in evading Russia’s sanctions. The bill gains a political component as a result of this. If cryptocurrency mining were to become legal, Russia would have an avenue to bypass sanctions that limit its access to global financial markets.
But how well this plan works is still up in the air. Because they are afraid of governmental attention, major cryptocurrency exchanges may not want to help customers who are doing business with sanctioned businesses.
Although the measure is a step in the right direction, it does not resolve all of the concerns raised about crypto mining in Russia. It is unclear what the precise energy usage threshold is for miners operating without a license. There has also been no clarification about the parameters and extent of possible regional mining bans. Such specifics will very certainly undergo more discussion prior to the bill’s finalization.
Taken as a whole, the measure under consideration shows that Russia is approaching cryptocurrency mining with caution. While recognizing the technology’s promise, it lays out steps to address worries about energy usage, money laundering, and its applications to evade sanctions.
Also Read: DOJ Counters the Defense of Roman Storm in the Tornado Cash Case
Wallets