Russia passes latest bill to regulate Bitcoin mining and legalize international Bitcoin payments

The Russian Parliament passes a law legalising international bitcoin payments with an overwhelming 404 votes in favour.

The final vote is scheduled for July 30, with implementation by September 1, 2024.

Circumventing SWIFT

The legislation aims to bypass the SWIFT network, from which Moscow has been disconnected for two years. This development is crucial for businesses affected by sanctions.

“This is a need for businesses, especially those affected by sanctions, that is, those operating internationally. It is not always possible to solve payment problems through standard methods,” says Yuri Chekhanchin, director of the federal financial monitoring agency.

Legislative purpose

The law prohibits domestic bitcoin payments, as the Russian central bank seeks to popularise its Central Bank Digital Currency (CBDC).

The central bank's reluctance stems from bitcoin's high conversion and transaction fees, making it less competitive compared to Visa, Mir, or its CBDC.

The law also bans cryptocurrency advertising, contrary to the trend. Despite this, a survey by the Russian Public Opinion Research Center shows that 20% of Russians are knowledgeable about cryptocurrencies.

Mining Regulation

The bill introduces regulations for bitcoin miners, requiring them to register and declare their electricity consumption.

Average citizens can mine without registration if they stay within legal energy consumption limits.

The Ministry of Digital Development will monitor miners' activities, ensuring compliance with the regulations set by the government and the Bank of Russia.

Miners must sell their bitcoins on accredited platforms to prevent unauthorised capital transfers abroad.

In 2023, Russian miners generated 54,000 BTC, representing 16% of the global hashrate.

Nikita Chaplin, a member of the Budget and Taxes Committee, highlights that regulation could reduce illegal mining, attract investment, and create jobs.