Russian Ministry Plans to Regulate Crypto Mining

The Russian Ministry of Economic Development has come up with a novel idea for the crypto mining industry in the country. According to a report published on Tuesday, the Ministry has suggested the authorization of crypto mining operations in regions with a sustainable excess in electricity production.

While the Russian government has been debating the regulatory policies and mandates for the digital token space, a federal ministry has formulated a separate proposal on the crypto mining industry.

The proposal, essentially suggests the implementation of reduced charges for constructing mining farms and data centers in particular regions of Russia. The plan also advocates the supply of discounted energy fees for such establishments. It has also proposed an installation of a power use limit for mining by people, allegedly discussing the enforcement of a greater energy surcharge for heightened energy expenditure. The enforcement authorities are, however, yet to decide on the said cutoff amount for this limit, according to the report.

In addition to that, the newly formulated regulations would dismiss the menace of inadequate power supply for housing, social establishments, and infrastructure in all the other parts of the country. The ministry also plans to officially identify crypto mining as a commercial activity with the implementation of taxes on recognized gains from cryptocurrency mining.

The ministry has not yet formally confirmed the conjectures over the new policies.

The recent ideation and recommendations over the regulations have followed the ongoing debate by various agencies in Russia over the crypto ordinance. As initially suggested, Russia’s Finance Ministry has been championing a restraint over the crypto industry, while the Russian central bank has been argumentatively demanding a blanket ban on crypto transactions, quoting investor protection perils.

As the government officially endorsed the idea of cryptocurrency regulation on February 8th, Bank of Russia’s governor Elvira Nabiullina henceforth announced that the bank did not back or hold up the state’s judgment and will resume its vehement opposition of any form of crypto adoption in the country. The government, along with the Central Bank, are allegedly anticipated to launch a collaborative crypto regulation bill this Friday.

Several prominent government-supported financial structures in Russia have given a nod to the plan to regulate the crypto space in the country lately. Anatoly Popov, the deputy chairman of the executive board at Russia’s banking conglomerate Sber, allegedly expressed the firm’s reinforcement of the idea of regulations in the industry in contrast to a blanket ban.

According to Popov, the company’s decision resonated with the decision of the government to regulate the cryptocurrency industry, rather than banning them. The authorities should find out a way to effectively regulate the space that will allow people to use and mine crypto, with legal taxes implied.