The lower house of Russian parliament, the State Duma, has voted against a piece of legislation designed to regulate cryptocurrency mining. While lawmakers turned down that proposal, which also aimed to legalize crypto payments in the country, another draft law on mining, which permits cross-border transactions with digital assets, is expected in the legislature in the near future.
Alternative Proposals to Regulate Crypto Mining Clash in Russian Parliament
This week, the State Duma of the Russian Federal Assembly voted to reject a draft law on cryptocurrency mining. The bill “On Mining in the Russian Federation,” was submitted earlier by members of the liberal New People faction.
Lawmakers criticized the sponsors for failing to properly formulate regulatory principles for the activity as well as requirements for data centers and mining operators and suggest a procedure for the taxation of mining companies.
Representatives of the parliamentary committees that reviewed the legislation also described it as fragmented and ambiguous, the Russian crypto news outlet Bits.media reported. They highlighted it doesn’t specify how miners and their equipment would be registered or how those who mine as individual entrepreneurs would be identified.
The rejection of the bill follows a recommendation by the Financial Market Committee. Its members noted that it provides for the use of cryptocurrencies for payments inside the Russian Federation, when the country’s constitution defines the Russian ruble as the only legal tender and bans so-called “monetary surrogates.”
Meanwhile, another legislative proposal to regulate the extraction of digital currencies has been put forward this week, too. According to Anton Gorelkin, deputy chairman of the Duma Committee on Information Policy, this new draft, which will contain provisions permitting cross-border crypto payments and facilitating the development of domestic crypto infrastructure, will be filed soon.
Quoted by RBC Crypto, Gorelkin explained on Telegram that this will be a more elaborate document that takes into account the opinions of the Central Bank and the Ministry of Finance and does not threaten the ruble as the only means of payment in Russia. The lawmaker is representing the ruling conservative United Russia party.
The future of cryptocurrencies and related activities such as mining has been the subject of prolonged discussions between government institutions in Moscow over the past year. Most officials maintain they should not be used for payments in Russia but due to the sanctions pressure the idea to legalize international crypto settlements has been gaining support.
A draft law “On Digital Currency” is also expected to fill the gaps in the regulatory framework remaining after the adoption of the law “On Digital Financial Assets.” The latter went into force in January of last year and covers primarily digital coins and tokens with an issuer.
Over the past couple of years, bitcoin mining has established itself as a profitable business in Russia, especially in its energy-rich regions. According to a recent report, revenues in the sector increased 18 times since 2017 but Russian miners were hit hard by Western restrictions imposed over the invasion of Ukraine.