Russia seeks to eliminate the ‘legal vacuum’ around crypto mining
- Russia’s deputy minister for energy, Evgeny Grabchak. proposes the regulation of crypto mining
- He also advocates for regional authorities to manage mining activities – energy quotas and allocation of sites
The discourse around Russia and cryptocurrencies is slowly turning into a never-ending affair. Various matters have come up, from the proposition to ban crypto before the Ukraine invasion to the role of crypto in evading sanctions and, most recently, the introduction of Bitcoin as an option for countries to pay for Russian oil exports.
Now, according to a report published by a local news agency Tass, the deputy minister of energy Evgeny Grabchak is proposing introducing a regulatory framework around cryptocurrencies.
Regional authorities should determine the location of sites for mining
The proposal represents efforts to eliminate, what he called, a legal vacuum surrounding crypto mining in the country.
“The legal vacuum makes it difficult to regulate this area and set clear rules of the game. This legal vacuum needs to be [eliminated] as soon as possible. If we want somehow to get along with this activity, and we have no other options in the current reality, we must introduce legal regulation, adding the concept of mining to the regulatory framework,” Grabchak said, speaking during a first national conference for crypto miners.
During the event held on Saturday in Irkutsk, the energy ministry official suggested that it would be more efficient if the ‘powers’ of allocation of energy resources and the specific mining sites were placed in the hands of regional authorities rather than the federal government.
This, he argued, would make it easy for regional jurisdictions to ensure that crypto operations are regulated in line with each region’s development ambition.
“Perhaps, it should be synchronised with the regions’ development strategies and other industry sectors’ plans,” he noted.
The view of the Central Bank of Russia
Before the invasion of Ukraine, the general sentiment was that Russia would be the next major hub for crypto mining, following a problematic relationship between crypto miners and the environments in China and then Kazakhstan (previous leaders in BTC hash rate).
However, to achieve these crypto-optimistic measures, the Central Bank of Russia would have to roll back on its stance to outlaw the mining of said digital assets.
In January, the bank sought the enactment of a blanket ban on crypto mining and the use of crypto due to financial stability concerns, environmental impacts, among other reasons.
Going ahead, though, it seems Russia is willing to contradict the proposition tabled by its central bank. In recent days, the Russian political class, including deputy prime minister Aleksandr Novak, has been beating the drum for crypto. It, however, remains unclear how fast the country will move to conjure up some regulations.
One can’t help but think, the weight of the sanctions is pushing Russia to loosen the ropes around crypto.