Putin legalises crypto mining in Russia

President Vladimir Putin has officially signed a law legalising cryptocurrency mining in Russia. This legislation marks a pivotal shift in the nation’s approach to digital assets, establishing a comprehensive legal framework to regulate the sector.   

The law, which will come into effect ten days after its publication on the government website, allows only Russian legal entities and individual entrepreneurs registered with the government to engage in cryptocurrency mining.  

Regulations and conditions for miners

The newly enacted law defines the rights and obligations of those involved in the cryptocurrency mining industry, introducing specific conditions for participation. Only those registered in a special government inventory can conduct mining operations. However, small-scale individual miners are exempt from this registration requirement if their energy consumption does not exceed government-imposed limits. This exemption allows hobbyists and small operators to continue their activities without formal registration, while larger mining operations will be subject to stricter oversight.  

The Russian government has also outlined measures to prevent the use of digital currencies for illicit activities, such as money laundering. These regulations aim to strike a balance between fostering innovation in the cryptocurrency sector and safeguarding the country’s financial system.  

Broader impact on the Russian economy

The law legalising cryptocurrency mining is part of a broader strategy by the Russian government to reduce its reliance on the U.S. dollar in international trade. By recognising cryptocurrency mining as a legitimate economic activity, Russia is positioning itself to play a more significant role in the global digital asset market.  

Additionally, the legislation permits the trading of foreign digital financial assets on Russian blockchain platforms, though the Bank of Russia retains the authority to ban assets it considers a threat to financial stability. This cautious approach reflects the government’s desire to promote digital innovation while protecting the country’s economic interests.  

Advertising and regional controls

The new law also imposes stringent controls on the advertising and promotion of cryptocurrencies within Russia. It prohibits the mass promotion of digital assets, likely to prevent the spread of potentially risky investments. Moreover, the legislation provides the government with the power to ban cryptocurrency mining in specific regions or territories, allowing for flexibility in managing the industry based on local conditions.  

Russia’s strategic approach to digital assets

During a recent government meeting, he emphasised the need for Russia to “seize the moment” and establish a robust legal framework that supports the expansion of digital assets both domestically and in international trade. This legislative development signals Russia’s intent to be a major player in the evolving global cryptocurrency landscape.