Russia took a significant step in legalizing cryptocurrency mining in the region. The new law has strict limitations, allowing only specific groups to undertake the activity.

A new law signed by President Vladimir Putin now recognizes crypto mining as a legal activity for entities listed in a state registry, local media agency Tass reported. This step signals the country’s desire to embrace the digital economy while controlling its potential financial impact.

Who Can Mine

Under this new legislation, only Russian legal entities and registered individual entrepreneurs may mine digital currency. However, individual miners are not completely excluded. Those operating below a government-established energy consumption threshold can reportedly participate without registering. This is expected to give smaller, independent miners a limited path to operating legally.

The law also defines key roles within the crypto mining ecosystem, introducing terms such as mining pool, mining infrastructure operator, and address identifier. These additions aim to create a structured and regulated environment for digital currency mining within the country.

The law allows the trading of foreign digital financial assets on Russian blockchain platforms. Yet, this comes with a restriction: the Bank of Russia retains the power to halt specific offerings if they are deemed a threat to financial stability.

A Controlled Approach

This provision aims to ensure that the country’s central bank maintains oversight and the capacity to intervene if necessary. Earlier this year, President Putin reportedly highlighted the economic potential of digital currencies in a government meeting, emphasizing the urgency of establishing a legal framework.

He framed digital assets as a strategic opportunity, noting that a clear regulatory environment would allow Russia to move quickly into this promising area.

Besides that, Russia announced plans to test digital rubles for real-world use cases last year. In a statement issued by the country's central bank, Russia highlighted plans to begin issuing the digital currency for broad use cases if the pilot project is successful.

The plan includes testing transactions, including opening digital wallets for the ruble, money transfers, transfers between users, payments of bills, and purchasing goods and services using digital currency.

This article was written by Jared Kirui at www.financemagnates.com.