The Ministry of Economic Development of the Russian Federation has just made a proposal to allow cryptocurrency mining in regions with a constant surplus of electricity production.
Russia looks set to legalise cryptocurrency mining
A few days after outlining the future regulation of cryptocurrencies in the country, the Russian government has taken another step towards the adoption of Bitcoin (BTC).
According to the daily Izvestia, a newspaper close to the Kremlin, the Ministry of Economic Development has formulated a proposal to allow cryptocurrency mining in regions of the country with a constant surplus of electricity production. A measure that should reduce the risk of power cuts due to overloading the electricity grid.
In its proposal, the Russian Ministry of Economic Development also suggests reducing the costs involved in setting up mining farms and other data centres, which are essential for developing this activity in the country. It goes even further, proposing to offer this industry reduced rates for the energy it consumes.
The Izvestia article states that the ministry intends to recognise crypto mining as a commercial activity, applying to it the taxes provided for this type of business. This would include the introduction of a tax on profits made from cryptocurrency mining.
Russia has a vested interest in allowing cryptos despite opposition from its Central Bank
Russia is perfectly positioned to embrace the crypto revolution. Yet that hasn’t stopped the country’s Central Bank from continuing to fight against the adoption of cryptocurrencies in the country.
In response to the Ministry of Economic Development’s proposal, it has reiterated its opposition to mining, citing risks to electricity supply as well as environmental reasons.
Despite the differences of opinion between the Russian government and the Central Bank, the Kremlin has every reason to accelerate the adoption of cryptocurrencies.
For one thing, Russia became the world’s third largest Bitcoin mining hub last year. It is therefore hard to see it giving up this lucrative business, especially since Vladimir Putin himself has taken a stand in favour of mining. On the other hand, the legalisation of crypto-currencies would allow the country to bypass some of the economic sanctions issued against it by Western countries, which are notably based on the use of dollars or euros.
In short, Russia has every reason to allow both mining and trading of cryptocurrencies. In a thread posted on Twitter, journalist Grégory Raymond even suggests that the country “will demand Bitcoin for its gas in the near future”. A decision that would further legitimise the king of cryptocurrencies.
Sources have mentioned to me the possibility of Russia demanding Bitcoin in exchange for its gas in the near future
– Gregory Raymond (@gregory_raymond) February 15, 2022
