Russia’s new law puts stricter controls on cryptocurrency mining, allowing only registered entities to mine and imposing regional restrictions. The government is currently monitoring cryptocurrency mining activities with the aim of preventing money laundering and terrorist financing through increased regulation.
Today, the Russian government issued A new law signed by President Vladimir Putin gives more power to the cryptocurrency industry. This law imposes strict rules, especially regarding the mining of cryptocurrencies, which are now under tighter government control.
Only registered Russian legal entities or sole traders may engage in mining operations. Additionally, mining pools, groups of cooperating miners, can be shut down by governments if they are deemed essential, thereby fundamentally changing how cryptocurrencies are managed within the country.
The Russian government promulgated a law signed by President Vladimir Putin on October 27 that expands state control over the cryptocurrency sector, including strengthening oversight of cryptocurrency mining activities and giving the government the power to shut down mining pool operations. The purpose is
— Wu Blockchain (@WuBlockchain) October 27, 2024
Strengthening oversight to combat illegal activities and address energy issues
This new law aims to curtail illegal activities, particularly money laundering and terrorist financing, which are sometimes associated with the unchecked nature of cryptocurrency transactions.
These rules currently require miners to notify Rosfin Monitoring, Russia’s financial watchdog, details of their income and digital currency holdings. This data is intended to provide authorities with broad awareness of the cryptocurrency ecosystem and ensure that all mining and banking operations comply with Russian law.
Reflecting concerns about the energy-intensive nature of cryptocurrency mining, governments now retain the power to restrict mining in areas where electricity usage is an issue. Large companies will be closely monitored, but companies mining at lower energy levels may continue to operate without registering.
This legislative measure is seen as an attempt to strike a compromise between national security and economic stability regarding the evolution of digital assets.
Legal framework for digital asset trading amid regulatory changes in Russia
Interestingly, the law, despite its strict stance, allows digital assets, including foreign-issued digital financial assets, to be traded on Russian platforms. This represents a departure from the original text, which prohibited nationwide distribution of mined coins.
The bank retains the power to block some digital assets if it is deemed a challenge to Russia’s financial stability, but the new version gives miners legal rights to exchange these assets under the supervision of the central bank. means are provided.
More broadly, Russia’s goal of incorporating cryptocurrencies into its financial system reflects Russia’s approach to managing digital resources in a larger sense, especially in light of ongoing international sanctions.
These rules have helped Russia establish itself as a participant in the global cryptocurrency market, despite obstacles related to geopolitical posture and restrictions imposed by Western sanctions.
In addition to that, CNF has previously highlighted XRP and Ripple as possible alternatives for cross-border payments by the Russian Central Bank, and therefore their increasing impact on the global financial system. It was reported that it has been proven.
Although Russia has not officially adopted XRP, this approval indicates that Ripple could play a larger role in other markets.
