The lower house of the Russian parliament, the State Duma, has voted on a piece of legislation designed to regulate cryptocurrency mining. While lawmakers have rejected that proposal, another bill aimed at legalizing crypto payments in the country, a bill that would allow cross-border transactions with digital assets, is expected to pass the legislature soon.
Alternative proposals to control the Crypto mining conflict in the Russian Parliament
This week, the State Duma of the Russian Federal Council voted to reject the draft law on cryptocurrency mining. The draft “On mining in the Russian Federation” was previously presented by members of the liberal New People’s Group.
Legislators have criticized sponsors for failing to properly set regulatory principles for the movement, as well as requirements for data centers and mining operators, and pointed to the taxation practices of mining companies.
Representatives of the parliamentary committees that reviewed the law also described it as fragmented and ambiguous, Russian crypto news outlet Bits.media reported. It does not specify how miners and their equipment are registered or how those who spend as individual entrepreneurs are identified, he said.
The bill was rejected following a recommendation by the Financial Markets Committee. The members pointed out that cryptocurrencies can be used for payments in the Russian Federation as the country’s constitution defines the Russian ruble as the only legal tender and bans so-called “money substitutes”.
Meanwhile, another legislative proposal to regulate the withdrawal of digital currencies has also been tabled this week. According to Anton Gorelkin, Deputy Chairman of the Duma Information Policy Committee, this new draft, which contains provisions allowing cross-border crypto payments and facilitating domestic crypto infrastructure, will be presented soon.
As Gorelkin, quoted by RBC Crypto, explained in Telegram, this takes into account the opinions of the Central Bank and the Ministry of Finance, and the only way of payment in Russia is not threatening the ruble. The lawmaker represents the ruling conservative United Russia party.
Cryptocurrencies and related activities have been the subject of lengthy discussions between government institutions in Moscow over the past year. Most authorities maintain that they should not be used for payments in Russia, but due to the pressure of the ban, the idea to legalize international crypto settlements is gaining support.
The “Digital Currency” draft law is expected to fill the remaining gaps in the regulatory framework after the “Digital Financial Assets” law is approved. The latter was launched in January last year and mainly covers digital coins and tokens with issuers.
In the last two years, Bitcoin mining has established itself as a profitable business in Russia, especially in energy-rich regions. According to a recent report, revenues in the sector have increased 18-fold since 2017, but Russian miners have been hit hard by Western sanctions imposed over Ukraine.
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