With holdings of nearly 10% of global crypto assets, Russian investors are among the biggest holders of digital currencies. The country is also a prominent destination for crypto miners around the world. To bring the mining of digital currencies under a regulated environment, Russia has accelerated its efforts to legalize mining operations in the past few months.
However, Russian Deputy Minister of Energy, Evgeny Grabchak believes that the crypto mining regulation vacuum is still massive. “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,” Grabchak told TASS, a major Russian state-owned news agency.
Earlier this year, several reports emerged about Russia’s potential recognition of Bitcoin as a foreign currency. While the regulatory environment around digital assets is still not clear in Russia, the Ruble-denominated Bitcoin trading volumes are surging in the region. Recently, BTC volume in Russia reached its highest level since May 2021 amid rising geopolitical tensions between Ukraine and Russia.
Regional Mining Approach
According to Grabchak, a regional-level approach for crypto miners would be more effective. The Russian Deputy Minister of Energy also said that crypto mining needs to be regulated under regional development plans.
“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. It would be more efficient to determine sites for mining and to free energy capacities for miners at the regional level,” Grabchak added.
Russia aims to introduce strict regulations around digital assets by the end of 2022. However, the country is not planning to impose a complete ban on cryptocurrencies or the mining activity of digital assets in the region.
