It has been a few months since State Duma introduced a bill concerning the legalization of crypto mining in Russia.
The bill was appreciated by the majority of lawmakers and even the Government’s top officials also supported the draft legislation.
Some even made statements on the adoption of the law and the rumor was that lawmakers would soon be voting on the draft proposal.
It has now been officially confirmed that the lawmakers in State Duma have deferred voting till 2023, without even specifying a timeframe.
Legalization of Crypto Mining in Russia
The mining draft bill was brought before the lower house by Anatoly Aksakov, a Russian lawmaker, and Chairman of the Committee on Financial Markets.
It was Aksakov himself who confirmed in an interview with a local media outlet called RBC that voting has been postponed until 2023.
Aksakov has been at the forefront of the Russian crypto industry and has been in charge of laying down the industry’s legal and regulatory infrastructure.
He explained that the draft proposal lacks proper provisions and hence further improvements are required from the regulatory point of view.
Digital Finance Assets Law Amendment
Currently, Russia is overseeing its crypto industry under the law called ‘Digital Financial Assets’. The said law was introduced right from the beginning of 2021 and is said to be a provisional temporary setup.
Resultantly, with a limited scope, the legislature is being implemented in the Russian crypto industry and covers only a few crypto-associated activities.
It was this law that was proposed to be amended so that crypto mining be made part of it as a legally recognized activity.
Russia is confident that it is going to provide the best conditions to the mining industry on its soil. This would that many mining firms would want to enter the Russian jurisdiction.
Therefore, the country is making the right moves to ensure it has them streamlined.
Russia’s Advantage over Competitor States in Power Sector
There is huge potential for the Russian state, particularly with regard to crypto mining and related activities. For instance, Russia enjoys an advantageous position over competitor states in terms of low-cost energy.
Even the country’s climate is such that it does not require huge consumption of electricity. Resultantly, Russia is the world’s richest country in terms of energy and power resources.
The country is also subletting its excessive energy resources to friendly neighboring countries.
Considering these aspects, the Russian Government has arrived at a consensus in which it has been allowing the local crypto industry to expand.
Hence, a new source of income has been established by the Russian Government for dealing with economic and financial difficulties.
Even the residents in energy-rich areas of the country are turning towards mining as a source of alternate income generation.
Crypto Backing from Official Quarters
In the year 2022, the Russian Government showed keen interest in crypto which is why the state felt the need of regulating crypto.
Still, a large number of Government officials do not support crypto, yet many advocates for crypto adoption. Even the country’s premier also has shown interest in adopting cryptocurrencies, especially for international settlements.
The other reason why Russia is pondering over crypto regulations is because of financial sanctions. Since Russia brought atrocities upon Ukraine, the West has been firm in limiting Russia’s financial reach.
The reach is hence cordoned off partially by the West through the imposition of various sanctions. The idea behind this is to force Russia to cease war against Ukraine.
Russia is however resisting and has refused to bow down before the West even if it is costing financial hardship.
Legalizing crypto mining and related activities is yet an alternate solution adopted by Russia to ease up sanctions’ impact.
Initially, the State Duma did not support the legalization of crypto mining and left the matter to be decided by the Russian Central Bank.
The Central Bank however approved the legalization of crypto mining while considering the financial hardships being faced by Russia.