President Vladimir Putin Signs New Law That Legalizes Crypto Mining in Russia

On August 8, Russian President Vladimir Putin signed a law that officially legalizes cryptocurrency mining in Russia.

According to a report by Russian news agency TASS, the law introduces several key concepts, including digital currency mining, mining pools, mining infrastructure operators, address identifiers, and the role of individuals organizing mining pool activities. 

It also clarifies that mining is part of turnover rather than the issuance of digital currency.

Under this legislation, only Russian legal entities and individual entrepreneurs registered in an official register can legally mine cryptocurrencies. 

However, individuals who do not exceed government-set energy consumption limits may mine digital currency without needing to be on the registry.

Additionally, the law allows foreign digital financial assets to be traded on Russian blockchain platforms. The Bank of Russia retains the right to ban specific digital asset issues if they are deemed a threat to financial stability.

Putin previously discussed the importance of digital currencies with government officials, emphasizing the need for a prompt legal framework and infrastructure to support digital assets in Russia. The law is set to take effect ten days after its official publication, with some provisions potentially having different effective dates.

On July 30, Russian lawmakers approved a bill that will permit businesses to use cryptocurrencies for international trade, according to a Reuters report. This move is part of Russia’s strategy to circumvent Western sanctions imposed following its invasion of Ukraine. 

The law is set to take effect in September, and Russian central bank Governor Elvira Nabiullina, a key supporter of the legislation, has indicated that the first cryptocurrency transactions are expected before the year’s end.

Russia has encountered significant delays in processing international payments with major trading partners such as China, India, and the United Arab Emirates, as banks in these countries, under pressure from Western regulators, have become increasingly cautious.

Anatoly Aksakov, the head of the Duma lower house of parliament, described the new law as a “historic decision in the financial sphere.” 

The legislation mandates the creation of an “experimental” infrastructure for cryptocurrency payments, which will be overseen by the central bank. However, specific details about this infrastructure have yet to be disclosed.