Russia Strengthens State Control Over Cryptocurrency with New Law
Russia has taken steps to further tighten its grip on cryptocurrency by implementing a new law that expands government oversight and control over digital currencies in the country. President Vladimir Putin signed the law, which became effective on November 1, empowering the government to impose restrictions on crypto mining activities based on regional needs and to regulate the infrastructure supporting these operations.
One significant aspect of the law is the government's authority to determine specific procedures and circumstances under which mining operations can be banned. This includes the power to shut down digital currency mining pools in certain areas. Furthermore, infrastructure providers that support mining activities will now be subject to government regulation.
The law also grants various federal agencies, including law enforcement and executive agencies, access to digital currency identifier addresses. This will enhance their ability to track transactions that may be linked to money laundering or terrorist financing activities.
Additionally, the responsibility for the national mining register has been transferred from the Ministry of Digital Development to the Federal Tax Service. The Federal Tax Service will now oversee mining registrations for businesses and have the authority to remove those with repeated infractions. Individual miners, on the other hand, can continue without registering as long as they adhere to specific electricity consumption limits. However, companies and individual entrepreneurs must comply with the new registration requirements.
In its efforts to regulate digital currencies, Russia is not only strengthening oversight but also developing its own state-backed digital currency called the digital ruble. The country has already legalized crypto mining and permitted the use of cryptocurrencies in international trade, aiming to bypass sanctions and reduce dependence on the U.S. dollar in foreign exchanges. In fact, in August, President Putin signed legislation that allows for experimental frameworks for cryptocurrency use in international transactions. The Bank of Russia will oversee these pilot projects, with approval required from the Finance Ministry, Federal Security Service, and Rosfinmonitoring.