Putin Finally Approves Bitcoin and Cryptocurrency in Russia
After much anticipation, Russian President Vladimir Putin has officially signed the long-awaited deal on cryptocurrencies and Bitcoin. The new law, set to take effect on November 1, aims to expand state control over the country’s cryptocurrency sector.
One of the key provisions of the law is the introduction of stricter oversight on cryptocurrency mining activities, giving the government greater authority to regulate the industry. This includes the power to impose local restrictions on mining based on regional needs and define specific procedures for implementing these restrictions. The government can also suspend mining pool activities in certain areas. Additionally, the legislation grants the government more regulatory control over infrastructure providers that support mining operations.
Furthermore, the law expands the responsibilities of federal agencies by allowing access to digital currency identifier addresses for executive and law enforcement agencies, such as the Federal Financial Monitoring Service (Rosfinmonitoring). This measure aims to support efforts in tracking cryptocurrency transactions that may be linked to money laundering or terrorist financing activities.
A significant change brought about by the new law is the transfer of managing the national mining register from the Ministry of Digital Development to the Federal Tax Service. The tax office will now oversee the register, monitor compliance, and impose penalties for repeat offenders. While individual miners can continue without registering as long as they stay within their electricity consumption limits, companies and individual entrepreneurs must comply with the new registration requirements.
Russia’s decision to tighten cryptocurrency regulations aligns with its digital currency strategy. The government is actively developing a digital ruble and aims to legalize crypto mining, allowing cryptocurrencies to be used in international trade. This approach is seen as a means to bypass Western sanctions and reduce reliance on the U.S. dollar for foreign exchange transactions.
In August, President Putin signed legislation that enables experimental frameworks for the use of cryptocurrencies in international transactions. The law allows for regulatory approval of cross-border crypto transfers, with oversight from the Central Bank of Russia, the Ministry of Finance, the Federal Security Service, and Rosfinmonitoring.
Please note that this article does not constitute investment advice.