The chief architect of Russia’s long-awaited crypto legislation has insisted that regulations on crypto trading and new rules on governance of the crypto mining sector must be addressed in the same law Project. And the news could be good for Russian crypto miners – with card tax breaks.
According to the Russian media Financial marketAnatoly Aksakov, the head of the State Duma’s Financial Markets Committee, told attendees of the recent Kazan Digital Week 2022 forum:
“The question of legalizing crypto-mining should be solved simultaneously with legalizing the circulation of cryptocurrencies, because distributed ledgers cannot exist without a mining system.”
Aksakov further claimed that the Russian Finance Ministry has been working hard to lay the groundwork for the legalization of cryptocurrency mining – a sector that is still growing rapidly in Russia.
A number of major energy producers have also backed the proposals. Some players are now piloting projects that involve working with industrial miners at oil drilling sites.
Energy companies have pushed for clearer regulations related to mining. As mining has no legal status, it cannot be classified as a form of industry – meaning energy companies have struggled to find ways to charge miners industrial energy tariffs.
Aksakov suggested miners would likely be charged more for their energy use under the ministry’s proposals. But he said that rather than “establishing a single rate for crypto miners at the federal level,” the ministry wanted to “grant rights to regional authorities.”
“Local authorities are better informed than central authorities about the electricity consumption situation in their own area.”
Regulation is finally coming to the Russian crypto industry?
The proposals of the Ministry of Finance relate to the issue of taxation. The ministry, Aksakov explained, appears set to create a two-tier system that caters to both individual miners with small-scale or “home-based” operations and industrial players.
For industrial miners, the proposals suggest taxing crypto at the time the tokens are mined. But individual miners would only be taxed when they sell their tokens for fiat.
The bonus for miners comes down to the ministry’s approach to VAT: The ministry says it doesn’t want to “introduce VAT” into the mining sector.
The biggest obstacle to the bill’s process remains the Central Bank, which has already come out in favor of a blanket Chinese-style ban. But with the ministry claiming this week that the bank has now agreed to allow businesses to make cross-border payments in crypto, it looks like the Central Bank is slowly getting to grips with crypto.