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Russia’s Central Bank to Allow Crypto Mining, but There Is a Catch

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The Russian Central Bank has said that it was willing to allow mining of crypto coins in the county. However, it proposed that the miners would need to sell their coins abroad and pay taxes. This statement was made during an annual meeting with Russian bankers. According to the first Chair of the bank, Olga Skorobogatova, they will allow miners to operate within the Russian Federation. However, he added,

At the same time, the question of how the miners will exchange what they have mined is still debatable. We, as the Bank of Russia, believe that they still have to do this outside the territory of Russia.

According to Mr. Skorbogatova, the decision was arrived at in consideration of control, reporting forms, and taxation. A week ago, the Finance Ministry published a draft law titled “On Digital Financial Assets”. If this law goes through, Russians would be able to buy and sell digital coins and tokens via authorized trading platforms, dealers, and brokers.

The Miners Will Still Have to Pay Tax

A legal expert commented on the issue and said that just because miners could sell assets abroad, it did not mean they would not pay tax. He went on to say that after miners sold their assets abroad, they would receive fiat currency from the sale. Thus, since the miner in the example is located within Russia, those earnings would be converted into Rubles. He compared this to what happens in the case of oil sales. For the earnings, the miners would then have to pay tax. Thus, the Russian state would not lose in any way.

The legal expert further added that the Russian Central Bank seemed more interested in protecting consumers from unreasonable risks. There was still a lot that was not known by most crypto miners, and fraudsters could exploit them.

Other Ministries Working to Regulate Crypto Mining

Russia’ Ministry of Communication and Mass Media also revealed that it was in the process of creating regulation for crypto mining in the nation. It told the media that it was developing a system that would allow them to detect crypto miners. To ensure that these miners declare the income they make from crypto mining, it proposed to give them special energy tariffs, energy quotas, and a 2-year tax holiday. For now then, it would seem that Russia is still welcoming crypto mining. This is different to what is happening in other nations globally that are banning or making it near impossible to trade in cryptocoins.

Image Credit: Deposit Photos

What do you think about the proposal from the Bank of Russia? Leave us your thoughts in the comments section below.

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