Russian Government Might Establish a Working Group to Regulate the Cryptocurrency Mining Industry

Nov 11, 2021 at 12:37 // News
Lana Smiley
Mining industry must be regulated

Representatives of the Liberal Democratic Party of Russia plan to submit a draught law on the regulation of cryptocurrency mining. They also suggest setting up a working group with representatives of various government committees to discuss the issue.

According to the party's representative Andrei Lugovoi, the State Duma should either ban mining completely or allow it by creating a proper framework. He told the local news agency REGNUM:

"Citizens will get the protection they need through a simple and clear framework for work and taxation, while the government will have stable budget revenues and control over the industry. A win-win strategy."

The initiative was well received by other members of the State Duma. In particular, it was supported by State Duma Chairman Viacheslav Volodin. He also instructed Deputy Chairman Aleksey Gordeyev to form a working group.


The fight against illegal miners

As CoinIdol, a world blockchain news outlet, has previously reported, in Russia, as in other countries of the former Soviet Union, there are problems with miners who illegally consume electricity without paying for it properly. 

The Irkutsk region suffers the most from this, as it offers the cheapest electricity prices in the entire country. This makes the region particularly attractive to miners. To combat energy abuse, the government has started developing special tariffs for the cryptocurrency mining sector. However, the price hike will likely push more miners into the shadows. Moreover, the tariffs will not work without a proper registration and monitoring framework.

It seems like the Liberal Democratic Party wants the State Duma to choose sides in their stance on cryptocurrency mining. If they want to legalise it, they need to create favourable conditions that encourage miners to come out of the shadows.

Kazakhstan was the first country to realise it. During a meeting on November 3, the country's president, Kasym-Zhomart Tokarev, stressed the importance of friendly conditions to encourage mining operators to work legally.

So far, the State Duma only plans to create a regulatory framework for crypto mining. However, it is unclear what this will look like. Meanwhile, other business sectors in Russia seem to be supporting the industry. For example, oil riggers are exploring the potential of using associated gas as an energy source for mining cryptocurrencies.

Show comments(0 comments)