Russia considers legalizing crypto mining amid government discord

  • November 10, 2021
  • Jennifer Moore
Russia considers legalizing crypto mining amid government discord

Russian government officials are going through the discussion phase on authoritatively perceiving cryptocurrency mining as a pioneering action. The Russian Ministry of Economic Development, the State Duma, and the Ministry of Energy are in favor of Crypto mining to be sanctioned and directed. 

As per the Ministry of Economics, this new crypto regulation could be highly beneficial for both the state and the crypto industry. However, the Central Bank stands in opposition to the decision. The Russian government is divided on the matter of legalizing crypto mining.

Also Read: Venezuela Gains Bitcoin Mining Boom Due To Cheap Electricity.

Benefits of Crypto Mining For Russia

The Center of Alternative Finance at the University of Cambridge reports that Russia is the third-largest country mining Bitcoin. Crypto mining fits well within the Russian civil code’s definition of entrepreneurship. According to the economics ministry, the regulation will benefit both the country and the crypto industry. 

The majority of miners don’t pay taxes at present. But if they were actual entrepreneurs, it would be much easier to legalize their crypto mining incomes and replenish the budget. Legalizing crypto mining as entrepreneurship will enable taxes for all crypto activities. Therefore, the state budget revenues will increase accordingly. From obtaining loans to investment projects, the crypto regulation will be beneficial for the citizens dealing with crypto. 

Also Read: Crypto Mining Uptrend and the Shift from China’s Mining Hub.

Current State of Russian Crypto Mining Regulations

There is currently no law on the mining process in the current Digital Financial Assets Act (DFA). It only comprises a definition of the issuance of cryptocurrency.

According to the RAKIB Vice President, Valery Petrov, Russia’s crypto income is about 12% of the world’s total crypto trade. However, due to the ambiguous legality of the crypto regulations, the Russian government has lost several hundred million of its budget. 

Anatoly Aksakov, head of the Duma’s finance committee, has noted that there is no ban on mining cryptocurrencies in Russia, but tax laws are unclear. As per the local news, he wants the determination of the taxation procedures for the industry and the assignment of a classification number. He has called on OKVED to finalize the taxation procedure and receive income from mining.

In Conclusion

While the Central Bank is adamant on its derogatory opinion of the decentralized industry, other government bodies are mostly positive. Crypto mining will never stop in Russia or perhaps, all across the world. It is only progressive to accept the new wave of financial innovation and regulate the crypto laws for the benefit of the nation.

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