The Russian government has enacted a new law signed by President Vladimir Putin that aims to expand state control over the country’s cryptocurrency sector.
The law, which will come into effect on November 1, introduces stricter oversight of cryptocurrency mining activities and gives the government more authority to regulate the industry.
The law gives the Russian government the authority to impose local restrictions on cryptocurrency mining based on regional needs. This includes the authority to define specific procedures for implementing restrictions and suspend mining pool activities in certain areas. The legislation also demonstrates the government’s intention to tighten control over the industry by providing greater regulatory control over infrastructure providers that support mining operations.
In addition, the law expands the responsibilities of federal agencies, granting access to digital currency identifier addresses to various executive and law enforcement agencies, including the Federal Financial Monitoring Service (Rosfinmonitoring). This expansion is intended to support efforts to track cryptocurrency transactions that may be linked to money laundering or terrorist financing activities.
A major change in the new law is the transfer of responsibility for managing the national mining register from the Ministry of Digital Development to the Federal Tax Service. The tax office will now oversee the register, monitor compliance and impose penalties for repeat offenders. While individual miners can continue without registering as long as they stay within their electricity consumption limits, companies and individual entrepreneurs must comply with the new registration requirements.
Russia’s latest move to tighten cryptocurrency regulations comes as the country seeks to advance its digital currency strategy. The government is developing a digital ruble and aims to legalize crypto mining, allowing cryptocurrencies to be used in international trade. The approach is seen as a way to bypass Western sanctions and reduce reliance on the U.S. dollar for foreign exchange transactions.
In August, President Putin signed legislation that would allow for experimental frameworks for the use of cryptocurrencies in international transactions. The law allows for regulatory approval of cross-border crypto transfers, with the Central Bank of Russia overseeing pilot projects. Approvals must also come from the Ministry of Finance, the Federal Security Service and Rosfinmonitoring.
*This is not investment advice.