The chief architect of Russia’s long-awaited crypto legislation has insisted that crypto trading regulations and new rules about the governance of the crypto mining sector must be addressed in the same bill. And the news could be good for Russian crypto miners – with tax breaks on the cards.
Per the Russian news outlet Finmarket, Anatoly Aksakov, the head of the State Duma’s Financial Markets Committee, told attendees at the recent Kazan Digital Week 2022 forum:
“The issue of legalizing crypto mining should be resolved simultaneously with the legalization of the circulation of cryptocurrencies, since distributed ledgers cannot exist without a mining system.”
Aksakov further claimed that the Russian Ministry of Finance had worked hard to lay the groundwork for the legalization of crypto mining – still a fast-growing sector in Russia.
A number of major energy producers have also lent their support to the proposals. Some players are now piloting projects that involve working with industrial miners at oil drilling sites.
Energy firms have pushed for clearer mining-related regulations. As mining has no legal status, it cannot be classified as a form of industry – which means energy companies have struggled to find ways to charge miners industrial energy tariffs.
Aksakov suggested that miners would likely be charged more for their energy usage under the ministry’s proposals. But he stated that rather than “establishing a single rate for crypto miners at the federal level,” the ministry wanted to “grant rights to the regional authorities.”
“Local authorities are better informed than the central authorities about the electricity consumption situation in their own areas.”
Regulations Finally Coming to Russia’s Crypto Sector?
The Ministry of Finance’s proposals center on the issue of taxation. The ministry, Aksakov explained, appears set to create a two-tiered system that caters for both individual miners with small-scale or “home” operations and industrial players.
For industrial miners, the proposals suggest taxing crypto at the moment tokens are mined. But individual miners would only be taxed at the point that they sell their tokens for fiat.
The bonus for miners comes in the ministry’s approach to VAT: The ministry says that it does not want “to introduce VAT” in the mining sector.
The biggest obstacle to the bill’s process remains the Central Bank, which has previously spoken out in favor of a blanket, China-style ban. But with the ministry claiming this week that the bank has now agreed to allow companies to conduct cross-border payments in crypto, it appears that the Central Bank is slowly starting to warm to crypto.