Russian Digital Currency Regulation Draft Omits Crypto Mining Definition

By Rishma Banerjee

The Russian Digital Currency Regulation Bill has removed the definition of crypto mining from its draft, which means that the issue of taxes won’t be clarified for the users.

Anatoly Aksakov, the Chairman of the Russian State Duma Committee on Financial Markets, said that the definition would not be necessary, as, as per the decision of the deputies, cryptocurrencies would not be integrated into the main economic framework of the country. New agency Interfax quoted him saying,

“Earlier we had some thoughts on Bitcoin, on its integration into our economic system. But as we decided we don’t need them, these ambiguous Bitcoins, therefore we don’t need miningas well.”

This bill, titled “On digital Financial Assets” was introduced by the Russian Ministry of Finance, in January, a modified version of which was put forward by Askakob and his group of deputies in March.  This new version aimed to protect the crypto owner’s rights by establishing a KYC, to regulate and verify customer identity, during crypto exchanges. The draft of this bill was approved by the State Duma in first of the three hearings in may. This initial drafts also contained definitions for tokens, Initial Coin Offerings, as well as rules for crypto exchange,  though it is not clear as of now, whether they remain in the current version. The present draft law will proceed to the second of three readings in the State Duma.

But, Aksakov later explained that since the legalisation of cryptocurrency payments, which had been the most significant expectation,  was unlikely to come about anytime soon, it would be pointless to include mining in the regulation proposition. He, however, said, that it would be brought under the tax agency jurisdiction if required, which is more in concurrence with his original stance on the issue.

The Russian Union of Industrialists and Entrepreneurs, a lobby group, in September, introduced an alternative crypto regulation bill,  which according to their vice president Elina Sidorenko will divide digital assets into three sections and get rid of the contradictions present in the “unfinished and fragmented” state bill.