The Council of the Russian Federation, the upper house of parliament, has given the green light for a proposed law aimed at regulating taxation around cryptocurrencies and mining, which President Vladimir Putin has just signed. The beginning of a new era in Russia?
on November 29, 2024 at 5:00 p.m.
Russia takes another step towards crypto
At the beginning of November, a law was presented to Russian parliamentarians to regulate the cryptocurrency market. Tax ceiling, recognition of the status of crypto, legal obligations for the mining industry, this law is modern and contrasts with the image we may have of Russia from the West. The country is not lagging behind on the subject, and the multiple sanctions imposed by the United States' allies have undoubtedly accelerated the process.
The bill was validated by both chambers of the Russian parliament and ratified by President Vladimir Putin this Friday, November 29. This legal change confirms the president's policy towards crypto.
For the country, cryptocurrencies represent an alternative to the unchallenged reign of the dollar. Tether's USDT has already been used for exchanges between Russia and China, and rumors were circulating about the possible legalization of cryptocurrencies as means of payment.
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However, this law dampens these hopes. For example, cryptos are considered stocks, not currencies. Which makes it possible to cap the tax rate at 15% but which removes the idea of seeing Russia and its billions in export volumes flow directly into the crypto market. At least for now.
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Crypto mining in the Russian crosshairs
A industry related to cryptocurrencies is in the sights of Russian legislators: mining. The law requires crypto mining operations to register the names of their customers and associated profits. This measure comes as winter approaches, a period when electricity becomes a strategic issue for Russia.
Mining operations had already been singled out for their impact on the electricity network. This was the case in Texas during the winter of 2021 when a blackout had struck the American state. A situation that Russia anticipates: mining has already been banned in certain regions, notably in the north of the Caucasus and in the occupied parts of Ukraine. A ban which extends from December 2024 to March 2031.
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Other regions such as Siberia benefit from a more flexible framework, with bans only in winter. This supervision comes at a time when the country is the second largest producer of cryptocurrencies in the worldafter the United States. In Russia, mining represents an annual consumption of 16 billion kilowatt/hour, or 1.5% of its total consumption.
If this law were to be accepted by the Russian president, the country could solidify its position on the international cryptocurrency market. Without the government having expressed the intention of officially using them to circumvent sanctions, the existence of a framework is an encouraging signal for individuals and companies, who will be able to use them for international trade. Meanwhile, other countries like the United States have still not defined the status of cryptocurrencies.
Source: Tass
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Cryptocurrency expert, Marc-Antoine began his journey in Web 3 alongside David Prinçay (current president of Binance France) in the French Cryptocurrency Club. Since then, it is by writing articles in the best-known crypto media in France that he has spread the good word. If you've read an article about crypto, there's a good chance you've read one of his articles. NFT, Blockchain, Web 3, DeFi, there is not a sector that is foreign to it. And don't ask him what the next coin to buy is: it's a maximalist Bitcoin (yes, no one is perfect).
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