Russian Authorities to Legalize Bitcoin (BTC) Mining in Select Areas

On Feb. 15, 02, 2022, a local source reported that the  Ministry of Economy in Russia has proposed to allow Bitcoin (BTC) mining in select regions. It also wants the government to reduce power tariffs and tax cryptos. The Ministry of Energy backs the proposals, but the Central Bank is against crypto adoption.

Russia May Allow BTC Mining in Several Areas of the Country

Earlier today, a local source reported that the Ministry of Economy has proposed legalizing BTC mining in select areas. It proposed that the areas that have surplus power generation should be allowed to mine cryptocurrency and the government to tax crypto trades.

The Ministry of Energy also backed the proposals while the Bank of Russia opposed it as it has been opposing all other crypto proposals. The bank fears that the proposals will remove cryptocurrencies from a legal shadow and expose Russians to risks. 

According to experts, if cryptos are legalized in Russia, it is best to tax profits from trades rather than every transaction.

Crypto Mining Regulatory Proposals in Russia

Crypto regulation has been heating up in Russia this year, with different authorities coming together to propose the best rules. Per reports, the Ministry of Finance is preparing legislative proposals concerning crypto mining. Its proposals want cryptocurrencies to be taxed as real estate with an introduction of income tax.

The Ministry of Economy wants these assets to be regarded as commercial activities subject to taxation during conversion against Rubbles. At the same time, The Ministry has proposed that the government reduce the cost of connecting mining firms to energy sources. 

Apart from reasonable connection charges, it wants the government to set low tariffs for the Federal Grid Company. It explained that the power prices wouldn’t depend on locality but the connection of the rigs to electricity and cost per kWH. Therefore, mining will be inexpensive and profitable if proper measures are taken.

The Ministry also wants the government to introduce a threshold for the power usage per individual. It has not provided the best amount of power to be consumed per individual since it lacks statistics on what power is enough per household.

Crypto Regulatory Tussles Among Russian Authorities Continues

Even though the Ministries of Economy and Finance have come up with reasonable proposals, the Bank of Russia is still skeptical. It has assessed the proposals negatively, saying that by creating unproductive energy demand in mining, Russia’s productivity will be in jeopardy. 

It explained that crypto mining wouldn’t be helpful to the country at such a point, and it also contradicts their carbon control goals. It added that the country’s competitiveness is mostly enhanced by cheap power but not advanced technologies.

Per the local source, the Ministry of Energy claimed to support cryptocurrency while the Ministry of Finance declined to disclose its stand. The appearance of taxation suggestions shows that the country is more likely to legalize the assets than ban them. However, no one knows how it will end up, but it’s best to follow the developments to influence future regulations.