While Russian authorities continue to work out a regulatory regime for digital assets and crypto, a federal ministry has made another proposal about the bitcoin mining sector. The new proposal is designed to recognize bitcoin mining as a commercial activity and bring in taxes on its realized profits.
Russia’s Ministry of Economic Development has approved the concept of crypto and bitcoin mining regulation in the nation, proposing to allow mining operations in regions with “sustainable surplus in electricity generation,” as reported on February 15 by the local news agency Izvestia.
As part of the latest proposal, the ministry suggested the introduction of lower fees for setting up data centers and mining farms in particular Russian regions and offer reduced energy rates for these facilities.
The ministry also aims to establish a power use limit for mining by people, allegedly proposing to introduce higher energy rates for any increased energy spending. For now, the authority is yet to determine a threshold amount for this phenomenon as mentioned in the report.
Furthermore, the ministry said that the newly proposed rules would eliminate the risks of inadequate power supply for social facilities, housing, and infrastructure in other areas in the nation. Moreover, the ministry allegedly proposed the recognition of crypto and bitcoin mining as a commercial activity and then introduce taxes on the realized profits from crypto mining.
The ministry is yet to respond to the reporter’s request for comment. Notably, the latest proposal comes amid the continuing uncertainty over cryptocurrency regulation in Russia, with various parts of the government still insisting on how to regulate bitcoin.Buy Bitcoin Now
Russia Wants To Regulate Bitcoin Mining Instead Of Banning It
As previously noted, Russia’s finance ministry has been championing the regulation of the entire crypto sector, while the Bank of Russia has been strongly insisting to ban all crypto transactions, citing investor protection risks.
As the government officially approved the concept of cryptocurrency regulation on February 8, the Bank of Russia Governor Elvira Nabiullina subsequently declared that the bank never supported the state’s decision and will continue opposing cryptocurrency adoption in Russia. The government and the central bank are allegedly expected to introduce a joint cryptocurrency regulation bill by February 18.
Some of the major state-backed financial institutions in Russia have already supported the idea of crypto regulation in the nation recently. The deputy chairman of the executive board at Russia’s banking giant Sber, Anatoly Popov, supposedly voiced the firm’s support of regulating the sector instead of banning it. He stated:
“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 crypto, take it into account AML [Anti-Money Laundering] mechanisms and taxation.”