The Central Bank of Russia will agree to the legalization of cryptocurrency mining, provided the proceeds from the activity are converted into fiat outside Russia. The regulator’s latest position on the matter comes after softening its stance on the potential use of cryptocurrencies for payments, even if it is internationally.
The Central Bank of Russia will accept the legalization of cryptocurrency mining
The monetary authority in Moscow is now set to support the legalization of crypto mining under the condition that Russian miners are obliged to sell the coins obtained in the process outside the country. This is according to a recent statement by Kirill Pronin, head of the Bank of Russia’s fintech department.
The central bank has been a staunch voice in the ongoing discussions over the future of cryptocurrencies in Russia, with earlier this year proposing a complete ban on most related activities, including mining. However, facing opposition from other government institutions and dealing with financial sanctions imposed on the war in Ukraine, its position has begun to change.
Governor Elvira Nabiullina indicated last month that crypto payments may be allowed if they do not “penetrate” the Russian financial system. At the same time, he stressed that digital currencies such as bitcoin should not be traded on Russian platforms as these assets are too volatile and risky for potential investors.
Petersburg International Legal Forum this week, Pronin said that mining would not fall under the responsibility of the Central Bank of Russia (CBR), as one of the ways to acquire cryptocurrency, crypto taken by miners as fees. Transaction verification. “The legalization of mining can be discussed, but in our opinion, a number of conditions must be met in this regard,” Interfax quoted him as saying.
Ivan Chebeskov, director of the Department of Financial Policy of the Ministry of Finance, pointed out that some large crypto mining companies based in the Russian Federation have also been forced to deal with foreign sanctions on withdrawing funds. He suggested that Russia may have to build its own exchange infrastructure to provide liquidity to the industry.
However, Kirill Pronin reiterated that according to CBR, cryptocurrencies mined by miners in Russia should be sold outside its borders and not allowed to be deposited within the country. The point is to avoid creating incentives for its subsequent use in domestic payments.
In addition to the new bill “On Digital Currency”, which is expected to broadly regulate Russia’s crypto space, in April a dedicated draft law “On Mining in the Russian Federation” was presented to the State Duma. Members of the lower house of the Russian Parliament propose to recognize crypto mining as a commercial activity using Russian information infrastructure and equipment located in the country.
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