Bank of Russia Ready to Legalize Crypto Mining

The Central Bank of Russia is ready to legalize crypto mining activities in the country on the condition that the proceeds generated through it are not converted into fiat in Russia, but are sold abroad. The latest position of the regulatory authority on the matter comes after it had softened its stance over the potential use of digital currencies for payment purposes, but that too for international transactions.

Crypto mining legalization

Moscow’s monetary authority is now ready to talk about legalizing crypto mining in Russia, as long as the coins minted through these activities are sold outside the country. This statement came from the head of the Financial Technologies Department of the Bank of Russia, Kirill Pronin.

Up until now, the Russian central bank has taken a hardline stance when it comes to the crypto discussions happening in the country. In fact, the Central Bank of Russia (CBR) had gone as far as proposing a complete ban on crypto-related activities last year. But, it had been opposed by the Finance Ministry and other government institutions.

Then came the sanctions that had been imposed against Russia due to the invasion of Ukraine and the Russian central bank has begun to change its position. Last month, the CBR’s governor, Elvira Nabiullina said that as long as they do not ‘penetrate’ the country’s financial system, they could allow crypto payments in the country.

But, she also added that Russian platforms should not be used for trading bitcoin and other similar cryptocurrencies because they are too risky and volatile for potential investors.

The conditions of the CBR

Pronin asserted that while the Central Bank of Russia (CBR) would not directly oversee crypto mining, it is definitely one of the methods used for acquiring crypto. After all, miners validate transactions and receive their fees in the form of crypto. He stated that they would discuss crypto mining, but there were certain conditions that had to be fulfilled before it can be legalized.

The Finance Ministry’s head of the Financial Policy Department, Ivan Chebeskov said that there were some crypto mining companies that had had to deal with sanctions in terms of withdrawals because they are based in Russia. He said that in order to provide the industry with liquidity, Russia may have to develop its own exchange infrastructure.

However, he reiterated that the crypto minted via mining would have to be sold outside the country’s borders and miners would not be allowed to keep it in the country. According to him, they do not want to provide incentives for its use in making payments locally.

Legislation in Russia

There is already a bill called ‘On Digital Currency’, which is being discussed in Russia for regulating the crypto space. But, apart from that, another draft bill was also submitted to the State Duma called ‘On Mining in the Russian Federation’ back in April. The members of the State Duma, which is the lower house of the parliament, have proposed that crypto mining be considered a business activity that uses Russian equipment and infrastructure.