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The Russian government’s crypto working group chairman believes Bitcoin (BTC) mining regulation is now a priority for Moscow.
After years of infighting and neglect, Russian government bodies, ministries, and the Central Bank finally appear close to regulating the crypto sector.
Per the Russian-language media outlet Happy Coin News, the working group’s chair, lawmaker Andreу Lugovoy said Moscow’s “first step in regulation should be crypto mining.”
A Russian crypto mining center. (Source: Novaya Gazeta/YouTube)Russian Government Crypto Policy Finally Ready for Rollout?
Lugavoy said politicians and regulators were currently “talking mainly about Bitcoin mining.” He added:
“The regulation of […] altcoins and their various iterations will come later. Anti-moneу laundering and anti-terrorist financing rules will be imposed on the crуptocurrencу sector. As such, privacy coins [such as Monero] will most likely be prohibited, as they are often used for criminal purposes.”
The working groups have been charged with breaking a political deadlock that has effectively left the country with an almost entirely unregulated crypto sector.
The lack of regulations is particularly harmful to the fast-growing crypto mining sector, which has grown exponentially in the past few years.
However, Lugovoy hinted that there was truth in reports last month that the Ministry of Finance, the Central Bank, and the anti-money laundering agency Rosfinmonitoring had “agreed on an approach to regulating cryptocurrencies.” He said:
“The working group has already held 10 meetings with representatives of the banking sector, the energy industry, as well as the crуpto industry, and the scientific community. We have tried to discuss all aspects of this area, as well as ways of legalizing it. It has been a long and painstaking process. But we will see the results of all these meetings very soon.”
Lugavoy said it was important for regulators to “act with consistency.” He explained:
“We must take the first steps in regulation, and see how effective these prove to be. We can then make adjustments and take the next steps, if necessary.”
The lawmaker also offered hope to crypto advocates concerned about the Ministry of Energy’s plans to hike electricity tariffs for miners. He said:
“Special tariffs for mining will negatively affect both the activities of existing legal miners and the advantages that the Russian Federation currently enjoуs.”
And the working group chair said that industrial miners should be taxed like any other “ordinary” company.
He concluded that “to ensure transparency,” miners should report all hardware they import into the nation.
US Treasury Secretary Janet Yellen wraps up four days of talks in China with a warning to the country’s banks and exporters: If you help bolster Russia’s military capacity, Washington will come after you. https://t.co/IU2txPX40l
— Bloomberg (@business) April 8, 2024
However, last month Russian government crypto policymakers suggested that miners should only use domestic crypto mining rigs.
Lugovoy also serves as the First Deputy Chairman of the State Duma’s Committee on Security and Anti-Corruption. He has been outspoken on crypto-related matters of late.
In February, he claimed that Western nations were using crypto to fund “agents” and operatives in Russia.
US Treasury Secretary Janet Yellen wraps up four days of talks in China with a warning to the country’s banks and exporters: If you help bolster Russia’s military capacity, Washington will come after you. https://t.co/IU2txPX40l
— Bloomberg (@business) April 8, 2024
In February, he also called Russian government crypto policy “bad to disgusting,” adding that failing to legalize crypto mining was damaging Russia’s economy. Lugovoy said:
“The lack of regulation in the cryptocurrency sector in Russia plays into the hands of [the West’s] sanctions policy against our country. It is undermining the anti-sanctions policies of the Russian government.”
In 2023, he also spoke out against a Central Bank-authored bid to ban crypto-related activities in the nation.
Russia reports a sharp increase in revenue in the first quarter, due to one-time tax payments and rising oil prices https://t.co/Q34dvU3Yx1
— Bloomberg (@business) April 8, 2024
Miners, meanwhile, have said that legalizing their industry could provide the Russian state with a $540.3 million tax revenue windfall.
Rosfinmonitoring has recently called for faster crypto regulations rollouts. The calls followed the Financial Action Task Force (FATF)’s move to downgrade Russia’s compliance rating in February.
The FATF ruled that Moscow’s efforts to police the industry were insufficient and did not do enough to prevent possible instances of money laundering.