Russian Ministry of Economic Development Wants to Legalize Bitcoin Mining in Specific Sectors

While the Russian government continues to develop a regulatory regime for digital assets, a federal ministry has come up with yet another proposal for the crypto mining industry.

Russia’s Ministry of Economic Development has approved the concept of crypto mining regulation in the country, proposing to allow mining operations in areas with “sustainable excess electricity generation,” local news agency Izvestia reported on Tuesday.

As part of the proposal, the ministry proposed reducing the cost of setting up mining farms and data centers in specific regions of Russia and providing lower energy rates for such facilities.

The Ministry of Economic Development also wants to establish limits on electricity usage for personal mining, reportedly proposing to introduce higher energy rates to increase energy bills. Authorities have yet to determine a threshold amount for this, the report noted.

According to the Ministry of Economic Development, the newly proposed rules will eliminate the risk of insufficient electricity supply for housing, social facilities and infrastructure in other regions of Russia.

Additionally, the Ministry of Economic Development has reportedly proposed to consider crypto mining a business activity and tax the realized profits from cryptocurrency mining.

The ministry did not immediately respond to Cointelegraph's request for comment. This article will be updated pending new information.

The latest proposal comes amid ongoing uncertainty over cryptocurrency regulation in Russia, with different parts of the government still debating how to regulate bitcoin.

As previously reported, Russia’s Ministry of Economic Development has been advocating for regulation of the crypto industry, while the Bank of Russia has been actively insisting on a ban on crypto trading, citing investor protection risks. With the government formally approving the concept of crypto regulation on Feb. 8, Central Bank of Russia Governor Elvira Nabiullina subsequently announced that the bank does not support the government’s decision and will continue to oppose the adoption of cryptocurrencies in Russia.

According to reports, the government and the central bank are expected to introduce a joint crypto regulation bill by this Friday.

Some of Russia’s leading state-backed financial institutions have recently backed the idea of regulating cryptocurrencies in the country. Anatoly Popov, deputy chairman of the executive board of Russian banking giant Sber, reportedly said the company supports regulating the industry rather than banning it.

“Our position is consistent with the government’s position that cryptocurrencies should be regulated, not banned. Effective regulation is needed to allow citizens and organizations to legally acquire cryptocurrencies, taking into account AML [anti-money laundering] mechanisms and taxation, "He said.