According to Interfax News Agency, the deputy head of the ministry of industry and trade, Vasily Shpak has given Russia’s unambiguous position on the regulation of Crypto Mining, during a speech at the United Russia discussion platform.
Why regulating crypto mining in Russia needs to be done
Russia ranks third after the United States and Kazakhstan in terms of mining capacity for bitcoin, the main cryptocurrency. The Deputy Minister, Vasily Shpak stated that the country recognizes mining as an industrial activity or industry and therefore needs to be regulated.
The deputy head of the ministry of industry and trade was quoted as saying “Here our position is completely unambiguous: mining must be recognized, regulated and built into industrial activity,” seeing as mining is a technological activity and therefore consumes energy.
While expressing concern about electricity usage and the cost of mining in the country, Shpak notes that mining accounts for more than 2% of the overall map of electricity generation in the country, this is more than the cost of electricity for agriculture.
He recalled that cryptocurrency mining is now in the “gray zone”, and is not taxed in any way, this creates risks for those people who are engaged in it, although it is quite possible to “whitewash” this activity, regulate it, make it understandable and transparent for the state.
Russia’s updated crypto mining bill
The fresh draft of the law “on mining in the Russian Federation” appeared in the database of the lower chamber of the Russian parliament, the State Duma. The document bears significant changes from the past version presented by co-sponsors on April 29.
While the text in the original bill remains untouched in general, the new draft lacks the subsection about a registry of mining operators, which would have to join to continue to work.
For the first time, the bill will also be focusing on the process and entities behind crypto mining. The bill stated that post-registration with concerned authorities, legal entities, and individual miners could carry out crypto mining.
The taxation for these activities will be defined separately, and if the owner is a Russian legal entity, data centers will also be provided for mining.