New Legislation in Russia to Legalize Industrial Crypto Mining, Limit Private Miners
Russian lawmakers are preparing to pass a law that will legalize the rapidly growing industrial crypto mining sector in the country. However, the law may also impose strict restrictions on home-based “private” miners. Anton Gorelkin, Deputy Chairman of the State Duma Committee on Information Policy, confirmed that the State Duma will discuss the new mining law during the current session. The mining bill is expected to be bundled with proposed crypto regulations that would effectively ban crypto exchanges from operating in Russia. However, exceptions will be made for companies that operate within a Central Bank-supervised sandbox. These exceptions will be exclusively for international trade firms that use crypto instead of USD in their trade deals.
Under the new proposals, industrial miners may have access to the Moscow-controlled exchanges but will only be allowed to sell their tokens. Gorelkin explained that the bill suggests that only Russian firms and business operators who have obtained permission will be permitted to continue mining. The lawmakers hope to adopt the bill in the coming weeks, and it is expected to come into effect on September 1.
Gorelkin also mentioned that individuals who do not exceed the energy consumption limits set by the government will be allowed to mine cryptocurrencies without applying for permits. This is a step back from previous attempts to ban all forms of non-industrial mining. However, the specific energy consumption caps are yet to be determined. Russian energy providers have been cracking down on illegal mining operations in recent months, indicating their low tolerance threshold for home-based miners.
Industrial miners will also be required to submit reports on their activities to Rosfinmonitoring, the nation’s anti-money laundering agency. Interestingly, Gorelkin also mentioned that industrial miners will be allowed to sell their coins without using Russian information infrastructure. This could refer to overseas crypto exchanges. Previous attempts to regulate crypto mining in Russia focused on forcing domestic firms to sell their coins on foreign trading platforms. The Central Bank believes that this policy will prevent crypto from entering the domestic economy and is a priority demand as it works on its digital ruble project.
The proposed law also grants power to energy providers and local government bodies. Officials in mining hotspots like Irkutsk have complained about excessive pressure on their grids caused by miners. Gorelkin explained that the law includes the possibility of the Russian government banning mining activities in certain regions. However, the terms and scope of such bans are still up for debate.
Experts in Russian law have expressed mixed opinions about the new bill. Some believe that lawmakers have tried and failed to regulate mining in the past. Others see the new legislation as a result of intensive lobbying from the industrial mining sector. Despite talks of adopting the bill by September, it is likely that lawmakers will need to revise the draft law before it can be voted on.