Jai Sahu
Russian government agencies might be getting ready to officially recognize the practice of large-scale cryptocurrency mining. Yet, there’s still potential for a significant obstacle from a key government body.
For a long time, miners have been requesting that Moscow formally acknowledge mining as a legitimate business activity. This month, they have proposed a new law to various government departments.
According to the Russian newspaper Izvestia, most government officials now seem willing to make mining a legal activity.
But the Ministry of Industry and Trade, which determines business categories, remains unconvinced.
Russian Ministries ‘Break Ice’ on Crypto Mining Discussion
Miners are urging Moscow to classify their operations as a legitimate sector and to include mining in the All-Russian Classifier of Economic Activities (OKVED).
The Ministry of Energy and the Ministry of Economic Development have both expressed their support for this initiative to Izvestia.
The Ministry of Finance, as per Cryptonews.com, appears likely to support the proposal too. It has suggested making industrial mining legal while proposing a ban on individual mining efforts.
A deputy head from the relevant State Duma committee mentioned that the proposal doesn’t have unanimous support.
However, the same official remarked that progress has been made and predicted a decision could arrive “within a month.”
MP Valery Seleznev, from the State Duma Committee on Energy, mentioned recent discussions on mining across various departments.
But now, Seleznev explained, the ministry is actively participating in the discussions.
Not Everyone on Board with Mining Plans, Insiders Say
At the start of the year, miners offered Russian officials access to their advanced data centers to boost government IT initiatives.
Further support for miners in the State Duma comes from lawmakers Anton Tkachev, Vladimir Plyakin, Grigory Shilkin, and Sardana Avksentyeva, who have endorsed their proposed legislation.
The Central Bank, which has previously advocated for banning crypto mining, has not yet shared its stance.
This week, a financial analyst mentioned that Moscow is not very interested in crypto discussions.
Instead, she noted, the Central Bank and most ministries are concentrating on implementing the digital ruble.
US officials this week indefinitely withdrew a survey aimed at gathering information on the crypto-mining industry's power use, hindering attempts to understand the sector's impact on grids and energy prices at a time of record activity https://t.co/2fZxyQndDT pic.twitter.com/TQ0QpRiN7L
— Reuters Legal (@ReutersLegal) February 28, 2024
Hope Springs for Russian Crypto Miners?
Authorities are reportedly exploring two paths for legalization. One would involve establishing a new, distinct OKVED category specifically for crypto mining.
The alternative approach would integrate mining into an existing section of the OKVED.
Miners have been consistently urging Moscow to remove their industry from the legal “grey” area.
The finance ministry is also in favor of this move, anticipating a significant increase in tax revenues if mining becomes officially sanctioned.
A proposal for a crypto mining law was presented to the State Duma in 2022 but didn’t progress past the initial review.
BitRiver, the country’s largest mining company, made a legislative proposal to the Minister of Industry and Trade Denis Manturov in mid-2023, which also didn’t succeed.
Russia and Western countries have traded barbs over a deadly attack by gunmen that killed 137 people in a concert hall outside Moscow. Here is a timeline of events before and after the attack: https://t.co/KRTqvqZYwO
— Reuters (@Reuters) March 26, 2024
The head of the Russian Industrial Mining Association (IPM), Sergei Bezdelov, told the media outlet:
“Taking into account the more attractive market conditions for conducting mining activities in the Russian Federation, we have every chance to push the United States out of first place.”
Earlier this month, the IPM said that Russian industrial miners were ready to invest $4 billion in the industry.