A new bill in Russia aims to legalize the industrial crypto mining sector while imposing strict restrictions on home-based private miners. The State Duma is set to debate this new mining law that may also include regulations to ban crypto exchanges in Russia, with exceptions allowed for companies in a Central Bank-supervised sandbox. Industrial miners are likely to have access to these centralized exchanges to sell their tokens, but only Russian firms with permission will be allowed to continue mining. The bill is expected to be adopted in the coming weeks and implemented on September 1, introducing a permit system for miners. Individuals who meet government-set energy consumption limits may be able to mine without permits, although the specific restrictions remain unknown.
The proposed bill also requires industrial miners to provide reports on their activities to Rosfinmonitoring, the anti-money laundering agency. There are indications that energy providers and local governments will have the power to ban mining activities in certain regions to alleviate pressure on overloaded grids in areas like Irkutsk. The bill appears to allow industrial miners to sell coins without using Russian information infrastructure, possibly referring to overseas crypto exchanges, following previous attempts to regulate mining by forcing domestic firms to trade on foreign platforms. The Central Bank’s priority demand is to keep crypto out of the domestic economy, as it moves forward with its digital ruble project.
Russian law experts are skeptical about the new bill, with some questioning its hasty drafting and lack of clarity on key definitions. There have been several failed attempts to regulate mining in the past, and it will likely require revisions before a vote can take place. The latest effort seems to be driven by lobbying from the industrial mining sector, pushing for legalization of their operations while restricting competition from private miners. Individual miners who do not exceed energy consumption limits will be allowed to continue without permits, but the exact thresholds are yet to be determined. Reports of crackdowns on illegal mining operations suggest that the government’s tolerance for home-based miners may be low, despite the potential for regulatory changes.
Chinese companies are turning to small banks on the border and underground financing channels, including banned cryptocurrencies, as big banks in China pull back from financing Russia-related transactions. This shift in financing sources highlights the challenges faced by companies seeking to navigate international trade and financial regulations amidst changing geopolitical tensions. The role of smaller banks and alternative financing methods is gaining prominence in facilitating transactions that may be restricted by traditional banking channels. As global dynamics continue to evolve, businesses are adapting to new realities by exploring diverse financial options to facilitate cross-border transactions and navigate geopolitical uncertainties.
