Russia’s Duma has approved a landmark bill legalizing Bitcoin mining and cryptocurrency payments, signifying a major leap in the nation’s digital currency strategy.

Groundwork Laid for Regulated Crypto Mining

A new report states that the Duma of Russia has passed a law to legitimize cryptocurrency payments and Bitcoin mining.

This measure, which was approved on the first reading, lays the groundwork for a digital currency mining business that is regulated. This bill represents a sea change in the country's stance on cryptocurrencies; its goals include the reduction of illicit activity, the attraction of investments, and the creation of jobs.

Deputy Anatoly Aksakov, who heads the Duma Committee on Financial Markets, spearheaded the effort to introduce the measure, which sets forth explicit regulations for Bitcoin mining. The goal, as stated in the RIA Novosti report, is to adopt stringent restrictions in order to decrease illicit mining activities and associated crimes.

Legislator Nikita Chaplin of the Budget and Taxes Committee claims that this rule will curb the illicit use of digital currency. He went on to say that last year, miners created approximately $3.5 billion worth of 54,000 Bitcoins.

Monitoring and Compliance by Digital Ministry

At the same time, the requirements for both individuals and legal businesses engaged in digital currency mining are laid forth in the draft law. The Russian government and the Bank of Russia will work together to establish these guidelines. Furthermore, compliance will be monitored by the Ministry of Digital Development to guarantee that mining operations follow the set regulations.

Per Coingape, the study does point out, though, that the government can, if needed, outright prohibit cryptocurrency mining in certain areas. Mining in the nation is limited to individuals, sole proprietors, and officially recognized businesses. Nevertheless, individuals who are not involved in business can engage in mining without being registered so long as their energy usage does not exceed the restrictions established by the Cabinet of Ministers.

Legislation enacted by the government will specify the process for keeping this registry. It is also against the law for businesses and legal organizations to engage in mining in addition to other operations involving energy. Fair competition in the energy sector and the avoidance of conflicts of interest are the goals of this division.

The bill requires cryptocurrency miners to disclose their earnings as well as the unique identifiers used for transactions. A government-authorized body will receive this information. To further assist with AML measures and foil attempts to fund terrorists, Rosfinmonitoring will also build a list of questionable bitcoin addresses.

Restrictions on Crypto Circulation

In the meanwhile, the measure authorizes the sale of digital currency that has been mined independently of Russia's information infrastructure. Having said that, with the exception of mining and distribution within mining pools, it forbids the circulation of digital currency within Russia. Additionally, it is against the law to promote digital currency issuance-related goods and services, as well as to advertise or sell cryptocurrencies to the general public.

The bill will be effective as of September 1, 2024, assuming it is passed.