Russia’s central bank is about to give permission to mine cryptocurrencies in the country. The proviso is that proceeds from the mining are converted into fiats currencies outside Russia. The latest development came after the bank relaxed its position on cryptocurrency usage.
The Central Bank Gives Its Nod to Legalizing Crypto Mining
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Russian miners are now obliged to sell any coin they mine outside the country. This is the new monetary policy condition attached to crypto activities. It was announced by the Head of the Financial Technologies Department, Kirill Pronin.
The Bank of Russia is at the forefront of talks about the fate of crypto. It had once suggested a complete ban on all crypto activities early in the year. Its position is now changing due to opposition from other agencies of the Russian government.
Another important factor that influenced the bank’s shift is the international sanctions against Russia. The bank has been dealing with financial sanctions from Western countries over the Ukraine war.
The central bank’s Governor, Elvira Nabiullina gave a clue about this last month. She said there can be permission for cryptocurrency payments. The standing condition is that it does not penetrate the Russian economic system.
Proper Clarity in Regulations
Pronin spoke at the St. Petersberg International Legal Forum. He stated that crypto mining is not in the purview of the central bank. Yet, it is one of the ways that the digital asset class can be acquired. It is like getting fees over validating crypto transactions carried out by miners.
He said further that the legalization of mining is up for discussion. However, some conditions must be met, Interfax quoted him.
The Director of Financial Policy at the Finance Ministry, Ivan Chebeskov, stated his view. He said some crypto miners in Russia have faced restrictions in fund withdrawal. His suggestion is for Russia to create its own exchange infrastructure to make liquidity available.
Kirill Pronin made it clear, however, that crypto minted in Russia should be sold outside. The assets are not to be accumulated within the borders. The idea is to avoid the possibility of having crypto used for domestic transactions.
The latest bill On Digital Currency is one of the ways to regulate crypto. A bill to regulate mining in Russia was sent to the Duma in April.
The lower chamber of Russia’s parliament suggested recognizing crypto mining as a business activity. It will classify it as a sector that uses Russia’s information systems and equipment.