Bill to allow miners to sell cryptocurrency in Russia under special regime
MOSCOW. Nov 18 (Interfax) - A bill regulating the mining and subsequent sale of cryptocurrency in Russia has been submitted to the State Duma.
The bill (No. 237585-8), which has been posted in parliament's database, would allow crypto miners to sell mined digital currency on foreign platforms and in Russia under the law on experimental digital regimes starting January 1, 2023.
The bill was authored by a group of lawmakers that includes Duma Financial Market Committee Chairman Anatoly Aksakov and Deputy Speaker Alexei Gordeyev.
The bill defines "digital currency mining" as activities to conduct mathematical calculations by operating computing devices and software and hardware to make entries in an information system that uses distributed ledger technology with the purpose of creating a digital currency and/or receiving remuneration in digital currency. The bill also introduces the designation of mining pools.
"It is stipulated that requirements for the activities of individuals and legal entities that conduct digital currency mining, including participants of mining pools, will be established by the government of the RF in coordination with the Central Bank, while control (oversight) over compliance with set requirements will be carried out by the federal government body authorized by the government of the RF," the Duma Financial Market Committee's press service said in a statement.
The bill also defines the mechanism for selling mined currency by miners. This was the main point of contention in discussions of earlier versions of the bill, since settlements in cryptocurrency are prohibited in Russia under current law.
"Digital currency obtained as a result of mining can be disposed of by the person who carried out the mining of this digital currency on the condition that Russian information infrastructure is not used in conducting transactions with it, with the exception of cases of transactions carried out in accordance with the established experimental legal regime," the bill states.
The bill also states that if the digital currency is sold on foreign platforms, this activity is not subject to provisions of the law on currency control and currency regulation.
The bill therefore gives crypto miners two ways to sell their cryptocurrency: through foreign systems without having to comply with the law on currency regulation and through a platform that will be created in Russia under the experimental legal regime. In both cases, transactions will have to be reported to the Federal Tax Service.
A memo attached to the bill said that this refers to the federal law on experimental legal regimes in the area of digital innovation, which the Duma passed on the summer of 2020. This law, among other things, allows the Central Bank to establish an experimental legal regime for projects in the financial sector for three years. After passing all approval procedures, a proposal is considered by the government, which issues an act to establish an experimental legal regime.
The bill also introduces a ban on advertising (or offering in one form or another) digital currencies, but makes an exception for digital currency mining.
"The introduction of the mining regulation proposed by the bill, as well as the establishment of certain requirements for this activity, will make it possible to legally conduct this activity, declare earned income, as well as pay the appropriate taxes to budgets at all levels. In addition, this will make it possible to eliminate the legal risks associated with this activity," Aksakov was quoted as saying in the committee's statement.
Cryptocurrency mining, the process of verifying and adding new transactions to a cryptocurrency blockchain, requires equipment that uses a great deal of energy. Remuneration for mining can be received by both individuals (individual mining) and companies (work in a pool). Payment for mining is made to cryptocurrency accounts and moving funds out of crypto wallets often requires conversion into traditional (fiat) central bank currencies.