The Bank of Russia and the Ministry of Finance of the Russian Federation have reportedly agreed on a draft law on cryptocurrency mining. As per the draft law, crypto mining should only be allowed in areas with abundant energy.

A report by RBC-Crypto stated that the Russian authorities are preparing to legalize crypto mining in the country but only in certain areas which have an abundance of energy resources. Crypto mining activities in areas scarce in energy will be banned.

Russian Deputy Finance Minister Alexei Moiseev said that the new legislation will be adopted by the end of 2022.

Anatoly Aksakov, Chairman of the parliamentary Financial Market Committee, confirmed that the law is set to be presented before the State Duma. According to Aksakov, crypto mining is only suitable for regions with an abundance of energy sources, like nuclear power plants and hydroelectric stations.

This new development follows a proposal by the Ministry of Economic Development to restrict crypto mining activities to areas that have a stable supply of energy.

As pointed out by Roman Nekrasov, co-founder of the ENCRY Foundation, Irkutsk Oblast and Krasnoyarsk Krai are known regions with hydroelectric stations while Tver, Saratov, Smolensk, and Leningrad are home to nuclear power plants, the report said. These regions have been home to most of the crypto mining-related activity in Russia.

Moreover, energy-deficient regions such as the capital Moscow along with Moscow Oblast, Belgorod Oblast, and Krasnodar Krai will not support any crypto mining activity, Nekrasov said. He pointed out that crypto mining activities can also be allowed in Karelia by the Russian authorities under special conditions wherein miners will have to construct small hydroelectric plans for their operations.

Interestingly, as per earlier reports, the Central Bank of Russia hinted that it will allow the use of cryptocurrency for cross-border payments and added that it does not "object to the use of cryptocurrency in international transactions."

The closure of crypto mines in Sichuan province, like this one seen in Canada, has resulted in the closure of more than 90 percent of China's Bitcoin mining capacity, state media said
The closure of crypto mines in Sichuan province, like this one seen in Canada, has resulted in the closure of more than 90 percent of China's Bitcoin mining capacity, state media said AFP / Lars Hagberg
Read more
Russia