Russian ministries could be prepared to “legalize” industrial crypto mining in the country. But one key department could yet throw a spanner in the works.
After years of dismay and repeated pleas for Moscow to formally recognize mining as a form of “entrepreneurship,” miners this month submitted a new draft bill to ministries.
Per the Russian newspaper Izvestia, most ministers are now ready to grant mining legal status.
However, the Ministry of Industry and Trade – which has the final say on business classifications – is not convinced.
Russian Ministries ‘Break Ice’ on Crypto Mining Discussion
Miners want Moscow to recognize their business as an industry. They want the state to assign mining a code in the All-Russian Classifier of Economic Activities (OKVED).
The Ministry of Energy told Izvestia that it “supports” this move, as does the Ministry of Economic Development.
The Ministry of Finance, Cryptonews.com believes, is also inclined to back the proposal. It has previously suggested legalizing industrial mining, and banning “private” mining ventures.
The media outlet quoted the deputy head of the “relevant” State Duma committee as stating that “not everyone is in favor of” the idea.
But the same lawmaker noted that “the ice has been broken,” and opined that a decision would be forthcoming “within a month.”
MP Valery Seleznev, a member of the State Duma Committee on Energy, said a “number of interdepartmental meetings” have been held on mining in recent weeks.
The Russian State Duma in session. (Source: Duma.gov.ru [CC BY 4.0])Seleznev noted that the Ministry of Digital Development had little interest in the matter until recently.
But, Seleznev said, the ministry has since had a change of heart and is now participating in talks.
Not Everyone on Board with Mining Plans, Insiders Say
Earlier this year, miners suggested that they would allow Russian government officials to make use of their cutting-edge data centers to expand state-run IT projects.
Miners have more support still in the State Duma, where lawmakers Anton Tkachev, Vladimir Plyakin, Grigory Shilkin, and Sardana Avksentyeva have backed their draft bill.
One party that has not yet made its feelings clear is the Central Bank, which has previously called for a ban on crypto mining.
A financial expert claimed this week that Moscow has little appetite for crypto-related discussions.
She said that the Central Bank and most ministries are instead focusing on rolling out the digital ruble.
US officials this week indefinitely withdrew a survey aimed at gathering information on the crypto-mining industry’s power use, hindering attempts to understand the sector’s impact on grids and energy prices at a time of record activity https://t.co/2fZxyQndDT pic.twitter.com/TQ0QpRiN7L
— Reuters Legal (@ReutersLegal) February 28, 2024
Hope Springs for Russian Crypto Miners?
The media outlet said authorities are “considering two options” for legalization. One of these involves “creating a new, separate OKVED category for [crypto] mining.”
The other would see ministers add mining to an “already existing section of the OKVED database.”
Miners have repeatedly called on Moscow to help take their industry out of the legal “grey” zone.
The finance ministry also wants to do this, believing it can expect a tax windfall if mining becomes “legal.”
A crypto mining bill was submitted to the State Duma in 2022, but failed to pass the committee stage after a first reading.
The nation’s biggest mining firm, BitRiver, approached the Minister of Industry and Trade Denis Manturov with a legislative proposal in mid-2023. This was also unsuccessful.
Russia and Western countries have traded barbs over a deadly attack by gunmen that killed 137 people in a concert hall outside Moscow. Here is a timeline of events before and after the attack: https://t.co/KRTqvqZYwO
— Reuters (@Reuters) March 26, 2024
The head of the Russian Industrial Mining Association (IPM), Sergei Bezdelov, told the media outlet:
“Taking into account the more attractive market conditions for conducting mining activities in the Russian Federation, we have every chance to push the United States out of first place.”
Earlier this month, the IPM said that Russian industrial miners were ready to invest $4 billion in the industry.
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