Russian Officials Shift Focus to Mining Amid Budget Pressures and Potential Regulations

By the end of the year new legislation relating to cryptocurrency mining will pass the second and third readings according to the chairman of the Russian State Duma Committee on the Financial Market Anatoly Aksakov. Changes to the Tax Code and the regulation of digital financial assets might be included in these proposals.

Kornelija KazlauskasJuly 14, 2023

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Russian Officials Shift Focus to Mining Amid Budget Pressures and Potential Regulations2

By the end of the year new legislation relating to cryptocurrency mining will pass the second and third readings according to the chairman of the Russian State Duma Committee on the Financial Market Anatoly Aksakov. Changes to the Tax Code and the regulation of digital financial assets might be included in these proposals. The Federal Law “On Experimental Legal Regimes in the Field of Digital Innovations in the Russian Federation” and other ideas are additionally under consideration by the government . The fact that lawmakers are paying more attention suggests that there may be difficulties ahead for miners.

Budget Deficit and Geopolitical Circumstances Drive Attention Towards Mining

Due to the pressure on Russia’s budget brought on by shifting geopolitical conditions there will be an important deficit of around 3.5 trillion rubles from January to May 2023. In order to combat this authorities are focusing on the dark realm of bitcoin mining . Taxing the creation of cryptocurrencies and imposing stronger controls on individuals engaged in unauthorized mining might raise money and keep miners accountable. Currently failing to pay customs fees can result in fines between 100,000 and 1 million rubles and a 12-year jail sentence . To protect the populace and restock the coffers authorities strive to control mining .

Anticipated Bitcoin Halving and Concerns over Equipment Quality

The impending Bitcoin halving in the spring of 2024 when the block reward will be halved to 3.125 BTC is another factor that impacts the concentration on mining . This decrease in compensation might result in a rise in demand for mining equipment including both second-hand and gray-market gadgets. Concerns about possible issues like burns and a financial deficit brought on by the unlawful selling of mines are sparked by such an increase in demand . However these hazards can be reduced by proactively obtaining authorized mining equipment.

Crackdown on Illegal Mining and Inspections

While new mining regulations have not been passed yet community members are already expressing concerns about the fate of their mining farms . The fight against illegal mining has been ongoing with previous focus on electricity theft . However the authorities are now more concerned about the lost tax revenue from the sale of illegal and often substandard equipment which can lead to incidents such as fires.