Russia is taking crypto mining on a whole new level. Following the invasion of Ukraine in 2022, international sanctions have been imposed on the country. Now, the country’s central bank is reportedly planning to establish new organizations to mine crypto assets and settle foreign payments, as reported by the local media.
Officials at the country’s central bank were cited this week by the state news agency TASS as saying that they were working on experimental legislation that would allow the usage of cryptocurrencies in export-import negotiations.
Russia’s trade with the West has been hurt by sanctions over its invasion of Ukraine, but connections with China have strengthened.
Crypto Mining For Cross-Border Payments
Elvira Nabiullina, governor of the Bank of Russia, made the announcement in the State Duma, one of the chambers of the Russian parliament, that the pilot program will allow cryptocurrencies to be used in exterior settlements.
There will be no noticeable shift in the country’s crypto mining ecosystem as a result of this action. According to Nabiullina, trading and payments in cryptocurrencies within Russia would remain illegal.
Russian President Vladimir Putin signed a law restricting bitcoin use in Russia last July. Image: Bitcoin Magazine
The Russian government’s stance on cryptocurrency is lukewarm at best. Russia’s president, Vladimir Putin, has a favorable stance toward cryptocurrencies, despite calls from the country’s central bank to outlaw cryptocurrency mining.
Creation Of ‘Specialized’ Crypto Mining Groups
Nabiullina has stated that legal entities in Russia will be able to form specialized crypto mining groups. Permitted actions, however, are still being refined. At first, only businesses with ties to the state will be able to mine under the new guidelines. Officials have indicated that private enterprises may be included in the program in the future.
According to what Nabiullina informed the State Duma:
“We adhere to the same position that, within the country, cryptocurrency […] should not be used. As for foreign payments, we assume that this is possible in the form of an experiment.”
Local newspaper Vedomosti said on Tuesday that Sergei Altukhov, a member of the Russian parliament’s economic policy committee, had revealed that the government was working on a bill to establish a national agency to regulate and supervise cryptocurrency platforms operating in Russia.
Pressed for details on the proposed crypto mining operational framework, Bank of Russia Deputy Chair Aleksey Guznov confirmed to reporters that the bank is in talks with the government.
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Private Entities’ Involvement Seen
“Currently, a discussion is underway with the government so that their scope of activity is clear,” Guznov said, adding that private companies may be able to contribute to those initiatives in the future.
Since Putin approved a law restricting bitcoin use in Russia last July, its use within the country has been severely limited. The government is gradually opening up to overseas crypto transactions, but domestic use is still heavily regulated.
-Featured image from Financial Times