Putin Finally Approves Bitcoin and Cryptocurrency in Russia
Russian President Vladimir Putin has given his long-awaited approval for the use of Bitcoin and other cryptocurrencies in Russia. The new law, which will be effective starting November 1, aims to increase state control over the country’s cryptocurrency sector.
Under the law, the Russian government will have stricter oversight of cryptocurrency mining activities and will have more authority to regulate the industry. This includes the ability to impose local restrictions on mining based on regional needs and to define specific procedures for implementing these restrictions. The government also has the power to suspend mining pool activities in certain areas. Additionally, the law grants greater regulatory control over infrastructure providers that support mining operations, further tightening control over the industry.
The law also expands the responsibilities of federal agencies, allowing them access to digital currency identifier addresses. This is intended to aid in tracking cryptocurrency transactions that may be associated with money laundering or terrorist financing activities. The Federal Financial Monitoring Service (Rosfinmonitoring) will be among the agencies granted this access.
One major change brought about by the new law is the transfer of responsibility for managing the national mining register from the Ministry of Digital Development to the Federal Tax Service. The tax office will now oversee the register, monitor compliance, and impose penalties for repeated violations. While individual miners can continue without registering as long as they stay within their electricity consumption limits, companies and individual entrepreneurs must adhere to the new registration requirements.
This move to tighten cryptocurrency regulations aligns with Russia’s goal of advancing its digital currency strategy. The government is actively developing a digital ruble and aims to legalize crypto mining, with the intention of using cryptocurrencies in international trade. This approach is seen as a way to bypass Western sanctions and reduce dependence on the US dollar for foreign exchange transactions.
In August, President Putin signed legislation that allows for experimental frameworks for the use of cryptocurrencies in international transactions. The law enables regulatory approval of cross-border crypto transfers, with oversight from the Central Bank of Russia, the Ministry of Finance, the Federal Security Service, and Rosfinmonitoring.
Please note that this article does not constitute investment advice.
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