Russian lawmakers are making progress towards legalizing the country’s industrial cryptocurrency mining sector, while also considering stricter regulations for smaller, private miners who operate from home. The State Duma is set to discuss a new mining law during its current legislative session, which could shape the framework for crypto mining in Russia by distinguishing between large-scale industrial mining and smaller private endeavors.
In addition to crypto miners, the new law will also impact crypto exchanges. Most crypto exchanges will be prohibited from operating in Russia under the forthcoming legislation, except for those under the supervision of the Central Bank’s regulatory sandbox. This includes international trading companies that use cryptocurrencies for global transactions instead of USD. Industrial crypto miners will be able to access these regulated exchanges, but only for selling their tokens. Only Russian corporations and authorized business operators will be permitted to continue mining activities.
The bill is expected to be passed soon and take effect on September 1. This move is part of Russia’s ongoing efforts to integrate crypto operations into its regulatory system, particularly focusing on international trade and industrial mining.
Industrial crypto miners will also be required to provide reports on their activities. While individuals adhering to government-established energy consumption limits can engage in coin mining without special permits, the specific energy consumption caps have not been defined yet. Russian energy providers are cracking down on illegal mining operations, suggesting a potentially low tolerance for residential mining setups. Industrial mining operations must now submit activity reports to Rosfinmonitoring, Russia’s anti-money laundering body, indicating increased regulatory oversight in the sector.
The proposed legislation aims to enhance local authority and address grid pressure caused by crypto mining activities. Industrial miners may be allowed to sell cryptocurrency independently of Russian information systems, potentially relying on foreign crypto exchanges. This aligns with previous regulatory strategies to direct domestic crypto output to international platforms, isolating it from the local economy. The bill also grants authority to the Russian government to prohibit mining in specific areas. However, the terms and extent of such prohibitions require further discussion and clarification.
Legal experts in Russia have mixed opinions on the new legislation. Some criticize the draft law’s quality, noting flaws in the concept of mining and overall drafting. They believe significant revisions are necessary before it can be considered for a vote. The development of Russia’s Central Bank Digital Currency (CBDC), the digital ruble, is progressing alongside these regulatory efforts. The digital ruble is designed to be a third form of money alongside cash and non-cash rubles, enabling online and offline payments.
The pilot phase for the digital ruble began with select banks, and a wider rollout is expected after 2024. The infrastructure and regulations necessary for mass adoption will be refined and expanded between 2025 and 2027, ensuring the digital ruble functions securely and effectively as a payment option.
