Anika Begay
Russian President Vladimir Putin on Thursday signed a law officially granting legal status to cryptocurrency mining in the country.
This landmark law not only ushers Russia into the global cryptocurrency economy, but also kick-starts a legislative effort to prevent illegal activity, ensuring the nation remains a player and regulator in the digital financial landscape.
New regulations for cryptocurrency miners
The new legislation, which is expected to come into force in November, gives registered law firms and individual entrepreneurs exclusive rights to mine cryptocurrencies, in an effort to balance innovation and control, according to multiple sources.
There is, however, a break for small operators: people who stay within certain government-set energy consumption limits can mine without having to register. The goal of this move is to support small-scale operations while ensuring that larger mining companies follow the rules.
Image: Techopedia
To help define accountability within the mining ecosystem, the new law adds a variety of complex terminology such as “mining pool” and “mining infrastructure operator.” Miners must now send their digital currency profits to a specific government agency, ensuring transparency in an industry often shrouded in secrecy.
To preserve financial stability, the Central Bank of Russia will also play an important role in monitoring and, if necessary, restricting transactions with digital currencies.
Economic Development: Russia’s Digital Future
Putin’s government wants to get ahead in the digital currency game, not just catch up. Considering it an essential component of Russia’s broader economic plan, the president has stressed the need for a solid legal framework for bitcoin mining.
Bitcoin market cap currently at $1.21 trillion. Chart: TradingView.com
During formal discussions, he stressed the transformative power of digital currencies to change everything from trade to foreign payments. Russia, he said, must seize this opportunity to create the infrastructure needed to thrive internationally and domestically in a future fueled by digital assets.
Restrictions and future implications
Russia isn’t throwing caution to the wind, either, with its newfound adoption of mining. Specifically, by prohibiting its use in financial transactions to reduce money laundering and other illegal activities, the legislation severely limits how mined digital currencies can be used within the nation.
The law also allows the trading of foreign digital financial assets on Russian blockchain systems, but the Central Bank retains the authority to ban any placement that could jeopardize financial stability. This dual strategy of encouraging mining under strict rules highlights the government’s intention to foster innovation without sacrificing control.
Featured image from The Moscow Times, chart from TradingView
