Russian lawmakers are preparing to legalize the nation’s growing industrial crypto mining sector, but they could impose strict limits on home-based “private” miners. According to media outlets Finam and RBC, Anton Gorelkin, Deputy Chairman of the State Duma Committee on Information Policy, confirmed that the State Duma will debate a new mining law during the current session.
The mining bill will be bundled with proposed crypto regulations in Russia. These regulations would effectively ban crypto exchanges from operating, with certain exceptions for companies in a Central Bank-supervised sandbox. However, this concession is exclusively for international trade firms that use crypto instead of USD in international trade deals.
Under the new proposals, these Moscow-controlled exchanges may also grant access to industrial miners, but they will only permit them to use these platforms to sell their tokens.
Gorelkin explained that the new bill proposes that “only Russian firms and business operators who have obtained permission” be allowed to continue mining.
Lawmakers previously expressed their hope to adopt the bill in the coming weeks, which will take effect on Sep 1.
Introduce Permit System
Gorelkin added that “individuals who do not exceed energy consumption limits established by the government” would be free to mine coins “without applying for permits.” This represents a step back from previous efforts to ban non-industrial crypto mining.
However, the proposed energy consumption caps remain unknown. Russian energy providers have recently been cracking down on illegal mining operations, indicating their tolerance threshold for home-based miners may already be low.
Industrial miners must also report their activities to Rosfinmonitoring, the nation’s anti-money laundering agency.
Overseas Crypto Exchanges May Play A Role
Interestingly, Gorelkin also mentioned that industrial miners might sell coins ‘without using Russian information infrastructure. This could refer to overseas crypto exchanges. Previous efforts to regulate crypto mining in Russia centred around forcing domestic firms to sell their coins on foreign trading platforms.
The Central Bank believes this policy would help keep crypto “out of the domestic economy,” aligning with its priority to fast-track its digital ruble project.
The bill also grants some power to energy providers and local government bodies. Officials in mining hotspots like Irkutsk have previously complained that miners place excessive pressure on their grids.
Gorelkin explained that the proposed law “includes the possibility of giving the Russian government the right to ban mining activities in certain regions.” However, the “terms and scope” of such “bans” are still up for “debate.”
Russian law experts expressed mixed opinions about the news. RBC quoted Yuri Borisov, a legal consultancy Digital and Analogue Partners partner, noting that lawmakers have tried – and failed – to regulate mining before. The latest effort appears to result from intensive lobbying from the industrial mining sector.
Despite discussing adopting the bill before September, Borisov said lawmakers would need to revise the draft law before a vote, stating: “This bill is already the eighth attempt to create a mining law. The writing exhibits evident cruddiness; it hastily outlines even the mining definition and is terrible, diminishing the likelihood of its acceptance in its current form.
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