On the one hand, Russian cryptocurrency advocates are working to attract global crypto miners. While on the other hand, local legislators are taking industry regulation more seriously. TASS news agency reported on September 8 that the chairman of the Russian State Duma Committee on Financial Markets, Anatoly Aksakov, said the Russian lawmakers are currently considering recognizing the cryptocurrency mining industry as a form of business. This will be following local entrepreneurship legislation. Aksakov said:
“As this [crypto mining] is a type of entrepreneurial activity, it is obviously necessary to include it into the state register, to regulate it as a type of entrepreneurship under an appropriate code, and impose relevant taxation.”
Aksakov further said that the Russian government is actively working on various regulatory initiatives related to the cryptocurrency industry, hoping to move forward with cryptocurrency accounts, mining, and digital currency issuance soon. He also emphasized the need to ensure greater clarity in the regulation of digital currencies, stating:
“We still need to discuss what digital currency actually is, although we call it currency, it is rather used as a financial instrument or a financial asset that is a subject to investment, rather than a means of payment.”
According to a former senior lawyer at Deloitte CIS and director of Alfacash, Nikita Soshnikov, “Practical implications for the industry will be limited to the business registration and tax obligations, of course, with a certain degree of official recognition as a legitimate business.”
Russian Regulation Of Cryptocurrencies
Russia formally adopted a basic legal framework for the regulation of such cryptocurrencies like the Bitcoin (BTC) itself in January 2021 under the Digital Financial Assets Law, which prohibits the use of crypto as a payment method. They are undoubtedly legitimizing cryptocurrency investment. However, it lacks clear rules for many specific aspects of the industry, including taxation, rules for owning and reporting crypto holdings, mining, and more. The Russian State Duma passed a separate cryptocurrency tax bill in its first reading in February, requiring citizens to report cryptocurrency transactions totaling more than $7,800 per year.
In August this year, the Council of Judges of the Russian Federation issued an official statement regarding the ownership of cryptocurrency by Russian judges. The agency specifically recommends that local judges avoid owning cryptocurrencies as they are considered foreign financial instruments, referring to local court orders.