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Russian cryptocurrency industry executives have submitted a draft bill to government authorities to legalize and regulate the nation's burgeoning mining sector, marking a potential shift towards formal recognition and economic integration.
Russian Crypto Association Takes Initiative with Draft Mining Bill, Eyes Regulatory Change
According to ComNews (via Crypto News), Alexander Brazhnikov, Executive Director of the Russian Association of Cryptocurrency and Blockchain (RACIB), discussed the bill at a cryptocurrency event on March 22.
Brazhnikov predicted that 2024 would bring "many changes" to the industry. He explains:
"I have spoken with regulators. They said that we should not wait for their proposals on the formation of a bill on mining in Russia. Instead, they suggested proposing ideas ourselves."
Brazhnikov claimed that RACIB had done precisely that. He claimed that the industry body had "sent letters" to ministries proposing "developing the crypto-economy and crypto mining in Russia."
The industry chief stated that the body had submitted draft regulation proposals to the Ministries of Energy and Economic Development. Brazhnikov also said he would send the draft bill to Rosfinmonitoring, the nation's anti-money laundering agency.
The RACIB chief stated that the Ministry of Finance would also be invited to "consider" the proposals. Industry leaders will hope for a breakthrough after years of fruitless negotiations and pleading with Moscow to legalize their business operations.
They will, however, be hopeful that this latest bid will succeed where previous attempts have failed. The RACIB bill has already received support from State Duma members Anton Tkachev, Vladimir Plyakin, Grigory Shilkin, and Sardana Avksentyeva.
The bill claims that, according to "expert estimates," Russian citizens "have opened more than 12 million cryptocurrency wallets" as the country becomes more crypto-savvy.
RACIB Proposes Legal Framework for Crypto, Aiming to Transform Russia's 'Gray' Market
According to RACIB, Russians currently hold $108 billion in cryptocurrency wallets. The country "is among the world's leaders in terms of mining capacity."
In contrast, the bill's authors stated that "all transactions" with cryptocurrency are "carried out in a 'gray' (unregulated) zone."
This means anyone wanting to conduct legitimate business operations with cryptocurrency risks facing criminal charges.
Miners have already tried and failed to persuade Moscow to support their cause. In 2022, a bill made its way to the Duma floor. However, this bill was abandoned following its first reading.
Undeterred, RACIB has decided to try again. On November 20, 2023, the body established a group to discuss crypto mining policy.
Members of the group included government representatives and energy industry insiders. Senior members of Russia's mining community also joined the working group.
The same group drafted a bill introduced on March 4, 2024. The body first sent this to the Russian Federation's Minister of Economic Development, Maxim Reshetnikov. As previously reported, miners appear eager to sweeten the deal with Moscow by offering ministers access to their new data centers.
Miners claim these centers could save ministers $32.4 million on new technology development plans. Industry executives have also stated they are willing to invest $4 billion in new multipurpose data centers.
Russian Miners Seek Legal Status and Sandbox for Digital Assets Amid Expansion Efforts
Mining companies like BitRiver are already constructing expensive new facilities in the Russian South. The miners' primary goal is to gain official recognition for mining as a "form of economic activity."
This means that the Russian government could start taxing cryptocurrency miners. However, it would also provide a secure future for companies looking to expand their operations in the country. The Russian crypto industry would also like Moscow to "create an experimental legal sandbox" for the "centralized conversion of digital assets obtained as a result of mining."
This suggests that some lawmakers are still interested in creating a "state-run" cryptocurrency exchange for miners. Some want the exchange to serve Russian firms that use cryptocurrency as a payment method in cross-border transactions.
Concerns Arise Over Potential Overlook of Crypto Bill Amid Focus on Digital Ruble
Elena Savina, an independent financial advisor, told the media outlet that there was still a chance the bill would go unnoticed.
Savina said Moscow is moving quickly on its CBDC project and may oppose efforts to legitimize the cryptocurrency sector. She explains:
"It is necessary to take into account that the state is currently focusing much of its efforts on the development of operations with the digital ruble."
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