Vladimir Putin, the president of Russia, approved legislation on August 8 that legalizes Bitcoin Mining activity in the country. A part of said legislation officially comes into force today, November 1, 2024.
Bliss law exposesalso according to the Duma, states that the requirements for carrying out bitcoin and Cryptocurrency mining activities by natural and legal persons “will be established by the Government in agreement with the Central Bank.” It may also prohibit mining in certain regions of the Russian Federation.
The law allows mining to be banned in several Russian regions. Source: http://publication.pravo.gov.ru/document/0001202408080016?index=1
According to the Lower House of the Parliament of the Russian Federation, also known as the State Duma or the Federal Assembly, this law that comes into force today defines the concepts of “mining”, “mining pool” and “mining infrastructure operator”. .
As CriptoNoticias reported, the law establishes that only Russian legal entities and individual entrepreneurs duly registered They will be able to carry out mining of Bitcoin in Russian territory. It also adds an exception to the same law for operators that do not exceed energy consumption limits. These will be able to mine without being registered.
According to the deputy head of the Ministry of Energy of the Russian Federation, Evgeny Grabchak, the ban on electricity is imminent. bitcoin mining in some regions of Russia after the law came into force. According to local media, not all regions of Russia would be able to offer sufficient electrical power infrastructure. to host bitcoin mining. “For example, we already have deficit areas: the Far East, southwestern Siberia, the South. There we will not be able to offer large capacities to anyone in the future until 2030,” Grabchak said.
Ambivalence towards Bitcoin mining
It is not yet known whether the legalization of mining in Russia is conducive to the industry or a government initiative to undermine it at its roots. Some of the legislation included in the law implies strong restrictions on miners and holders of bitcoin and crypto assets in the region.
For example, that the coins obtained from mining can only be traded on Russian cryptocurrency platforms. Among other things, this could make it difficult to access liquidity with bitcoin and cryptocurrencies, which are global systems. This measure could hinder the profitability of mining cryptoassets.
As CriptoNoticias reported, not only can the government completely ban mining in certain regions of the country. The Central Bank of Russia may prohibit the accumulation of cryptocurrencies at any time if they find any threat to financial stability. From what the Central Bank has said, it is inferred that, in the worst case, This may result in immediate confiscation of cryptocurrencies; at best, a mandate to the bearer to immediately settle them in rubles. In both cases, the profitability of the miners is jeopardized.
These and other measures included in the legislation make the community think that this law, rather than promoting activity in the country, could be simplifying its control by the government. The mandatory identification of miners by the state apparatus could facilitate the collection of taxes, as well as compliance with the measures of the law. On the other hand, legalization, but preserving the right to deregister at any time, does not bring confidence to the industry in Russia.
The entry into force of this law means that bitcoin miners, in Russia, are no longer operating in a “gray zone”as explained by Anna Maximenko, a lawyer at KKMP Legal, a Russian law firm.
The disambiguation of this ambivalent area for mining can mean that what was previously neither legal nor illegal could now go against the laws, and merit fines, suspensions or even prison sentences.
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