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Russia is making significant strides in regulating its cryptocurrency mining industry. Government officials and industry leaders convened at the inaugural Industrial Mining Association (IMA) forum held in Moscow.
Taxation for Crypto Miners
On October 14, the event saw participation from 70% of cryptocurrency mining farms in Russia. The discussions primarily revolved around taxation, the legal aspects of mining, and the impact of cryptocurrencies on cross-border trade.
A two-tier tax system proposed by the Federal Tax Service (FTS) for cryptocurrency mining companies was a central agenda item. This plan involves miners making a deposit after receiving their cryptocurrencies in wallets, and subsequently paying an additional tax upon sale.
FTS official Alexey Katyayev stated, “A definitive decision on the taxation system has yet to be made. However, cryptocurrency mining will not be subject to VAT, and individual miners will pay income tax on their earnings.”
Cross-Border Payments and Experimental Legal Regulation
Another key point of discussion at the forum was the use of Russian cryptocurrency mining for cross-border payments under the Experimental Legal Regulation (ELR). Currently, the Central Bank of Russia is developing the necessary infrastructure for cross-border transactions using digital currencies.
However, differing opinions emerged on this topic. Some participants expressed concerns that domestic cryptocurrency production may not be sufficient for export, while others suggested using other financial digital assets designed for the international market instead.
Deputy Chairman of the State Duma Information Policy Committee Anton Tkachev emphasized, “The anonymity of the experiment is vital to prevent potential penalties and to maintain the competitiveness of the Russian cryptocurrency mining sector.”
The Federal Tax Service proposed creating a national registry for cryptocurrency mining to enhance industry transparency. Mining companies will need to provide information on their data center locations, energy consumption, and the origins of their mining equipment.
Additionally, reporting on cryptocurrency production and electricity usage will also be required. Although much of this data will be kept confidential, the registry system aims to improve legal compliance and oversight.
Katyayev remarked, “I can say that mining companies will not benefit from tax reductions in their operations with other sectors, but regulations will increase competition in the industry.”
Participants at the forum concurred that cryptocurrency mining in Russia holds a bright future. Continuing to develop comprehensive regulations by the government will support the growth of the sector.
BitRiver CEO Igor Runets stated, “After the necessary facilities for energy-intensive computations are established in the next 1-2 years, the industry will create new opportunities.” Intelion Data Systems CEO Timofey Semenov expressed that transparency and legal clarity will enable companies to be listed on exchanges, creating new capital opportunities for large enterprises.
Regulations to be implemented in Russia’s cryptocurrency mining sector will not only support industry growth but also enhance competition through a legal framework. Transparency and compliance will be critical in gaining the trust of market players.
