The proposal seeks to classify cryptocurrency mining as a commercial activity and impose taxes on profits earned.
While the Russian government works on a regulatory framework for digital assets, a federal ministry has made another proposal regarding the crypto mining industry.
According to local news agency Izvestia, Russia’s Ministry of Economic Development has approved the concept of crypto mining regulation in the country, proposing to allow mining operations in areas with “sustainable surplus in electricity generation.”
The ministry proposed lower fees for establishing mining farms and data centres in specific Russian regions, as well as lower energy rates for such facilities, as part of the proposal.
The ministry also wants to establish a power use limit for individual mining, reportedly proposing higher energy rates in exchange for increased energy spending. According to the report, the authority has yet to establish a threshold amount for this.
The newly proposed rules, according to the ministry, would eliminate the risk of insufficient power supply for housing, social facilities, and infrastructure in other parts of the country.
Furthermore, the ministry is said to have proposed recognising cryptocurrency mining as a commercial activity and imposing taxes on realised profits from cryptocurrency mining.
The ministry did not respond right away. This article will be updated as new information becomes available.
The latest proposal comes amid ongoing uncertainty in Russia regarding cryptocurrency regulation, with different parts of the government still arguing over how to regulate Bitcoin (BTC).
As previously reported, Russia’s finance ministry has advocated for the crypto industry to be regulated, while the Bank of Russia has been adamantly opposed to crypto transactions, citing investor protection concerns. On the same day that the Russian government formally approved the concept of crypto regulation, Bank of Russia Governor Elvira Nabiullina stated that the bank did not support the state’s decision and will continue to oppose crypto adoption in Russia.
According to reports, the government and the central bank will introduce a joint crypto regulation bill this Friday.
Recently, some major state-backed financial institutions in Russia have backed the idea of regulating cryptocurrency in the country. Anatoly Popov, deputy chairman of the executive board at Russia’s banking behemoth Sber, is said to favour regulating the industry rather than outright prohibiting 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 [Anti-Money Laundering] mechanisms and taxation,”