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Russia advances crypto mining regulations amid forum talks

Russia advances crypto mining regulations amid forum talks

GrafaGrafa2024/10/17 00:20
By:Liezl Gambe

Russia is advancing plans to regulate its cryptocurrency mining sector, with key discussions taking place at the inaugural Industrial Mining Association (IMA) forum in Moscow on October 14. 

The event brought together government officials and industry leaders, representing 70% of Russia's mining farms, to address topics like taxation, legal frameworks, and the role of digital assets in cross-border trade.

A primary focus was a proposed two-tier tax system by the Federal Tax Service (FTS). 

According to FTS official Alexey Katyayev, the plan would require miners to make an initial deposit upon receiving cryptocurrencies, followed by additional taxes when they sell. 

Katyayev clarified, “Cryptocurrency mining will not be subject to VAT, and individual miners will pay income tax on their earnings.” 

The proposal aims to establish a transparent tax structure without offering specific reductions for mining activities.

Cross-border payments were also a focal point, with discussions on using Russian-mined cryptocurrency for international transactions under the Experimental Legal Regulation (ELR). 

While the Central Bank of Russia is developing infrastructure for such transactions, opinions varied. 

Some industry representatives questioned whether domestic production could support exports, suggesting alternative digital assets for international use.

The forum highlighted the importance of transparency and compliance. 

The FTS proposed creating a national registry for mining companies to report data, such as energy consumption, data center locations, and equipment origins. 

This initiative aims to enhance legal oversight while maintaining confidentiality of sensitive information.

Deputy Chairman of the State Duma Information Policy Committee, Anton Tkachev, emphasised, “The anonymity of the experiment is vital to prevent potential penalties and maintain the competitiveness of the Russian cryptocurrency mining sector.”

Industry leaders expressed optimism about the sector's future. 

BitRiver CEO Igor Runets noted that establishing energy-intensive facilities over the next 1-2 years will create new opportunities. 

Timofey Semenov, CEO of Intelion Data Systems, added that clearer regulations could enable companies to list on exchanges, opening new avenues for capital growth.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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