The Russian Ministry of Economic Development (RECD) has announced that it would cut a significant percentage of taxes on Bitcoin mining activities within the region.
This announcement, which was reported by local news source Izvestia, further explained the plans of the Kremlin government to encourage more mining investment within the region by mapping out strategic areas with electricity surplus designated for cryptocurrency miners. Observers have denoted the move as one of the major ways the President of Russia, Vladimir Putin, can position the nation to reap the utmost benefits from the buzzing crypto industry.
While Russia seems to want to attract investments in mining, it is still hesitant about its acceptance of crypto. The governor of the Central Bank of Russia, Elvira Nabiullina, disclosed earlier this week that the Apex bank “will spare no effort to convince the government and go into more detail about arguments of which they see significant risks in crypto.”
As the legislative arm continues to act on the charge to draw up a comprehensive guideline for crypto regulations, it is uncertain if the government would adopt the contents of such regulations. But Vladimir Putin remains unwavering in his decision to centralize and control all forms of crypto that would be issued or exchanged within the Russian territory. It is also rumored that the new law outlaws the activities of popular exchanges and data analysis platforms like Coinbase, FTX, and Chainalysis, as the government fears that these companies could be weaponized as data mining tools for details about Russian citizens.
Already, the country is becoming a visible force to reckon with within the crypto market. Over 12 million cryptocurrency wallets have been reportedly opened in Russia alone, containing close to 2 trillion rubles. Russia currently ranks third in the world in terms of global mining capacities and has been touted to be the next mining heaven after Kazakhstan began caving under the overload on its electricity supply capacity because of mining activities.
Digital Ruble on the way
Despite the risks that have been continually echoed about crypto, Russia is not oblivious of the inherent benefits that it possesses. As a country visibly tatted with international sanctions, Vladimir Putin has constantly expressed the potential for crypto to be used as a tool to facilitate international trade and circumvent trading currency restrictions.
China may also share the same sentiment, leading to its current global CBDC dominance, as it continues to gatekeeper its economy from external crypto influence. Either way, both China and Russia would have to compete with the US CBDC, which has already achieved 1.7 million transactions per second speed in its latest test exercise.
