The latest move by President Putin regarding cryptocurrency further underscores Russia’s efforts to facilitate international payments.
According to reports from the local news agency TASS, President Vladimir Putin has signed a new law legalizing cryptocurrency mining activities in Russia.
The document states:
Foreign digital assets can be traded on Russian blockchain platforms, and the Central Bank of Russia will have the authority to prohibit the issuance of individual assets if they are deemed a threat to the country’s financial stability.
Cryptocurrency mining activities are recognized as part of revenue, not as the issuance of digital currency.
The law also introduces new concepts, including cryptocurrency mining, mining pools, mining infrastructure operators, address identifiers, and individuals organizing mining pools.
However, the law also imposes certain restrictions:
Only legal entities and individual entrepreneurs registered in Russia are allowed to participate in mining activities.
Russian citizens still have the right to register for cryptocurrency mining but must comply with the regulated energy consumption limits.
The new law will take effect 10 days after its official publication, unless other effective dates are established later.
Before President Vladimir Putin officially legalized cryptocurrency mining, the Governor of the Central Bank of Russia, Elvira Nabiullina, announced plans to implement an international payment system using cryptocurrency in 2024.
Additionally, the law on the use of cryptocurrency in international transactions is expected to be passed by the State Duma, the lower house of the Russian parliament, in the near future.
Once the cryptocurrency law is approved, cryptocurrencies will be regulated similarly to foreign currencies in Russia. The Central Bank of Russia will be responsible for overseeing issues related to cryptocurrency, while the Federal Financial Monitoring Service, the Federal Tax Service, the Federal Security Service, and the Federal Property Management Agency will control revenue from cryptocurrencies.
It is evident that Russia is rushing to legalize the use of cryptocurrency domestically as sanctions from the U.S. and Western countries related to the Ukraine conflict continue to put pressure on the national payment system. This situation directly led to the Binance exchange leaving the Russian market after being accused of facilitating transactions for at least five banks on the Western sanctions list.
The Russian government began to embrace cryptocurrency in 2023 by supporting organizations to experiment with crypto payments, establishing a blockchain-based international payment system, and passing a law on the digital Ruble.
