Russian President Putin officially signed a law on Thursday (August 9) legalizing bitcoin and cryptocurrency mining, but only for specific registered entities and individuals. The Russian government said it has allowed residents to trade in cryptocurrencies. This means that the BRICS has reached an important milestone in the field of digital currency development.
According to Russian state media reports, the new law will only allow "registered legal entities and individual entrepreneurs" to mine cryptocurrencies. However, the law also allows any individual to mine cryptocurrencies as long as they do not exceed the energy consumption limit set by the government.
(Source: TASS)
Decrypt cited TASS's report that Russian residents will also be allowed to trade in cryptocurrencies, but the Russian central bank reserves the right to prohibit any activity it deems a threat to the country's currency.
(Source: Decrypt)
The Russian legislative body passed this law just a week ago, and also passed a second law that legalized cryptocurrencies as an international payment method to evade international sanctions, the second law is still awaiting the approval of President Putin.
In 2014, the United States and its allies imposed economic sanctions on Russia for annexing Crimea. After Russia's illegal invasion of Ukraine in 2022, countries have increased punishment. #Russia-Ukraine War#
Cryptocurrencies have been illegal payment methods in Russia since 2022, but Putin seems to have an open attitude towards digital assets; last month, the president talked about using cryptocurrencies for international settlements and expressed support for a package of bills passed last week.
Putin had previously talked about digital asset mining, and in 2022, he said that Russia had "a certain competitive advantage" in the field due to surplus energy.
It is reported that the definition of "cryptocurrency mining" is an energy-intensive process of using computers to verify transactions on a digital currency network. Miners earn rewards by earning network-native cryptocurrencies, and this activity can bring ample profits on blockchains such as Bitcoin.
With the development of cryptocurrency networks such as Bitcoin, the mining industry is also constantly developing: now, such operations are usually carried out in large warehouses, which are filled with expensive machines, consume a lot of energy, and are operated by large companies.
According to Watcher.Guru, the BRICS has recently strongly embraced digital assets. The organization is reportedly considering creating its own currency using blockchain technology, which may further eliminate the use of the dollar by using these digital assets. As a major member state of the alliance, Russia's signing of the Bitcoin mining law undoubtedly supports this idea.
(Source: Watcher.Guru)
After Russia officially legalized Bitcoin and cryptocurrency mining, it will allow cryptocurrency trading on local blockchain platforms. In addition, this law will take effect in just 10 days.
This is not Russia's first law supporting cryptocurrencies this year. At the end of July, the country began allowing the use of cryptocurrencies in international trade, a decision aimed at combating Western sanctions. However, this seems to have also enhanced Moscow's trade capabilities with the BRICS nations.
El Salvador is seeking to increase trade with Russia after the Putin government's decision. In addition, the implementation of this decision will have a direct impact on trade relations with China and the UAE. Legalizing cryptocurrency mining is just another step for Russia and the BRICS in moving towards a more digital financial future.