- Russia’s new measures aim to limit crypto mining in energy-heavy regions to prevent excessive consumption, with miners required to report activities and adhere to new power usage limits.
- Alongside energy restrictions, Russia introduces crypto-specific tax rules, treating digital assets as property, while legalizing Bitcoin mining for international trade, signaling a regulated crypto market.
President Vladimir Putin has endorsed new measures to limit cryptocurrency mining in 13 regions of Russia, including areas with significant energy demands. The restrictions, effective from December 2024 to March 2031, aim to conserve electricity during peak winter months and ensure sustainable energy use.
After the law expanding government control over crypto mining in Russia was signed by Putin, as CNF reported, the government now monitors cryptocurrency mining activities, aiming to prevent money laundering and terrorist financing through tighter regulations. The report highlighted that:
Fascinatingly, the law does allow the trade of digital assets—including foreign-issued digital financial assets—on Russian platforms despite the tight stance. This represents a departure from the original text, which forbade the national distribution of mined coins.
The affected areas include Siberian regions like Irkutsk, known for low electricity costs and cold climates favorable to mining. Occupied Ukrainian territories such as Donetsk and Luhansk are also impacted.
Targeting Miners with Energy Scarcity and Tax Compliance
To curb energy strain, unregistered crypto miners face a 6,000 kWh monthly cap on power usage. Exceeding this threshold requires obtaining a business license. The government, however, hopes this measure will regulate unregistered mining operations and prevent excessive power consumption.
Yet, despite favorable mining conditions, regions like Irkutsk may see reduced activity due to these restrictions, potentially impacting mining outputs.
Alongside the restrictions, Russia has introduced crypto-specific tax rules. Cryptocurrencies are now treated as property for taxation, with income from mining and trading taxed at market value. Miners can deduct operational costs, while crypto transactions remain VAT-exempt.
Mining operators must also regularly report their activities to comply with the regulations. These measures reflect Russia’s broader strategy to regulate the crypto sector while balancing economic and energy demands.
As a side note, in a recent CNF update, it was stated that Russia’s Duma has passed a bill with 89.8% approval to legalize Bitcoin mining and allow crypto payments for international trade. With this new measure, currently, according to CoinMarketCap data, Bitcoin (BTC) is trading at $95,610.18, having surged by 4.08% in the past day and 6.36% in the past week.
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