Russia’s Ministry of Energy is exerting pressure on legislative authorities to recognize cryptocurrency miners as legitimate energy consumers and implement corresponding regulations. In what could be the next phase in developing a comprehensive regulatory framework, the implementation of mining-related taxes is on the table.
A Step Towards Legalizing Industrial Crypto Mining
As the Energy Ministry advocates for the legalization of industrial cryptocurrency mining, Deputy Head Pavel Snikkars underscores the urgency for legislators to advance pertinent bills. In a notable advancement, Russia’s Energy Ministry is fervently advocating for the legalization of industrial crypto mining, urging parliamentary members to act promptly.
In a statement to Tass, Snikkars noted, “We seek to identify miners as a distinct consumer category. We anticipate the introduction of a taxation system for this consumer category. Identifying them is crucial to us, and we understand that certain regulatory aspects will need to be introduced for them.”
This statement indicates the Ministry’s intention to categorize cryptocurrency miners separately, which could facilitate more effective regulation. Snikkars is pressing lawmakers to respond promptly while stating that restrictions will be imposed on excessive power production capabilities for crypto miners.
Taxation is Necessary due to Pressure on Energy Resources
Cryptocurrency mining has seen a substantial upswing in Russia, imposing additional pressure on the country’s current energy needs. Recent reports reveal that Russia has become the second-largest Bitcoin miner worldwide, following the United States. Reports indicate that the country’s mining power output increased to 1 gigaton in the first quarter of 2023.
The Russian Ministry of Finance believes that cryptocurrency mining taxation could generate over $200 million annually for the government. Ivan Chebeskov, the head of financial policy in the department, projected that mining revenue could reach approximately $1.1 billion. Chebeskov suggested a 20% market rate might significantly contribute to the tax pool.
Previously, the mining sector in Russia was not recognized as a legitimate industry. The country’s intentions for a national cryptocurrency exchange were recently dismissed. However, Moscow is swiftly regulating mining as it focuses on de-dollarizing its economy. Contrary to popular concerns, President Putin stressed that Russia has no plans for de-dollarization.
The Future of Bitcoin Mining in Russia
Anatoly Aksakov, Chairman of the State Duma Committee on Financial Market, posited that cryptocurrency mining in Russia could become legal by 2024. Aksakov accentuated the potential economic benefits of mining and expressed support during his speech at the St. Petersburg International Economic Forum.
The potential of cryptocurrency mining in Russia is being seen as a source of additional revenue, a step towards legitimizing the industry, and a potential solution for energy consumption. The future holds promise for this burgeoning sector, and the regulatory authorities are gearing up to meet this new challenge head-on.
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