Last week, the Russian government broke Crypto Twitter following its decision to view crypto assets as currencies. Following this, the central bank of the country was advised to work with the government to draft laws governing the industry. However, crypto seemed to be creating a divide among these Russian officials.
The Russian government’s decision to legalize crypto in the country took many by surprise. But, the country’s central bank topped this list. The bank in fact pointed out how these assets could facilitate illegal activity. Following this, the President of the country, Vladimir Putin urged the officials to reach a midpoint with regard to regulating cryptocurrencies. However, the central bank Governor’s latest statement articulated something else.
Last Friday, the Bank of Russia Governor Elvira Nabiullina appeared at a press conference and stated,
“The approaches proposed by the government do not yet allow neutralizing the risks that we see, and at the same time, they create new threats. We see significant risks here and I hope good sense prevails.”
Now, both the government and the bank have been working towards compromising. Despite all these efforts Governor Nabiullina, Finance Minister Anton Siluanov, and Deputy Prime Minister Dmitry Grigorenko came nowhere close to a settlement.
Russian Ministry pushes for legalization of Bitcoin mining
As a tiff between the government and the bank persists, the Russian Ministry of Economic Development was trying to regulate the Bitcoin mining industry.
Bitcoin mining can be quite a controversial subject. Therefore, the Ministry wanted to introduce or allow mining only in regions that entailed sustainable surplus in electricity generation. This wasn’t all, the federal ministry intended to formulate low fees as well as energy rates for mining farms set up in particular regions of the country.
Additionally, the high energy consumption of the Bitcoin mining process was also considered. Thus, the Russian ministry wanted to set up a limit on power use. This would also be followed by increased rates for higher spending of energy.
Similar to all the other industries, Bitcoin mining would also fall under the purview of the tax department. Profits acquired through mining would be taxed as the process would be categorized as commercial activity.