Russia Approves Crypto Payments for International Trade, Mining Regulations to Follow

• Russia’s new bill allows crypto for international trade, pending final approval, mandating miners report suspicious transactions.
• Duma’s crypto mining bill could legalize mining by September 2024, with final adoption expected before August 5.
• Proposals for private mining range from bans to home mining with energy limits, as Putin addresses high energy consumption.

According to RIA Novosti, a measure allowing businesses to utilize cryptocurrencies for foreign trade has been approved by the Russian parliament. The measure is currently awaiting final clearance from the President’s office and confirmation by the upper house of parliament. If this bill is passed, miners will be required to notify Russia’s anti-money laundering organization, Rosfinmonitoring, of any questionable transactions.

Pending Legislation on Crypto Mining

The bill is only the first step. The law that would legalize mining digital currencies has already been read in its first reading by the State Duma. If this law is approved, crypto mining will be made lawful in Russia on September 1, 2024. It is anticipated that the Duma will approve the law in the next few days. According to lawmaker Anton Gorelkin, the proposal will be approved in its entirety by August 5, the deadline for the Duma’s spring session.

Despite this progress, the fate of private miners remains uncertain. Several proposals are under consideration. One proposal suggests banning non-industrial mining. Another alternative could involve allowing power companies to target and prosecute private miners. A more lenient approach may permit home mining within specific energy consumption limits. Alternatively, lawmakers might delay decisions on private mining until a future session.

Energy Consumption and Regional Impact

President Vladimir Putin has expressed concern over the high energy consumption associated with Bitcoin mining. Russia’s Energy Ministry reports that mining consumes about 1.5% of the country’s total energy. This amounts to approximately 16 billion kilowatt-hours annually. Putin highlighted that Russia’s low energy costs make it a popular location for mining.

Dagestan, a North Caucasus republic, is a mining hub despite facing regular electricity shortages due to infrastructure issues. Consequently, the government is under pressure to address these challenges. While the Central Bank previously suggested banning mining, the industry’s rapid growth has prompted a reconsideration of regulations.

Russia is on the verge of changes in its cryptocurrency sector. The proposed laws aim to regulate crypto payments and mining, reflecting a growing need to manage the sector’s impact. These developments could reshape Russia’s role in the global crypto market and influence future regulatory approaches.