Russian President Vladimir Putin has signed a law allowing cryptocurrency mining in the country, state-owned media has reported, as lawmakers brainstorm how to skirt sanctions in the pariah state.
The law establishes regulations for the previously outlawed crypto mining industry in the country, limiting the activity to legal entities and individuals who register with the Ministry of Digital Development. Entities and entrepreneurs who do not register will be allowed to mine only if they do not exceed certain energy limits, the Tass state news agency reported.
Russian residents will also be allowed to trade digital currencies, according to the report, but the Russian central bank reserves the right to ban any activity it deems to be a threat to the country's currency.
Putin Signs Ban on Crypto Payments in Russia
Russian President Vladimir Putin today signed into law a national ban on using digital assets for payments. The action comes after the Russian government and central bank have long debated what to do about cryptocurrency. Back in January, the Bank of Russia proposed an outright ban on crypto—for payments or investments. Today's law doesn't go quite that far. In February, Russia's Finance Ministry submitted a draft of cryptocurrency regulations to the government which, like the law enacted toda...
The Russian legislature passed the law just one week ago, along with a second bill that legalizes the use of digital currency as a way to make international payments, thereby skirting international sanctions. The second bill still awaits the president's authorization.
The U.S. and its allies hit Russia with economic sanctions back in 2014 for its annexation of Crimea in 2014. The countries stepped up penalties following Russia’s illegal invasion of Ukraine in 2022.
What is Bitcoin?
—Bitcoin started it all. It was the first cryptocurrency, and it launched an industry that now includes thousands. But who invented it, how does it work, and why is it so important? What is Bitcoin? Bitcoin (BTC) is a peer-to-peer cryptocurrency. Think of it as a digital token. You can't physically touch or hold Bitcoins, and all Bitcoin transactions are logged on a public, decentralized, immutable ledger. The first official purchase using Bitcoin was for pizza in May 2010. Two pizzas from Papa...
Cryptocurrencies have been illegal in Russia as a form of payment since 2022 but Putin appears to be opening up to the idea of digital assets; last month, the president spoke about the use of cryptocurrencies for international settlements, signaling support for the package of bills passed last week.
Putin has also previously spoken about mining digital assets. Back in 2022, the Russian leader said that the country had “certain competitive advantages” in the sector thanks to its surplus of energy.
Cryptocurrency mining is the energy-intensive process of using computers to verify transactions on a digital coin’s network. Miners are rewarded for their participation by earning fees in the network's native cryptocurrency, and the activity can be lucrative on blockchains such as Bitcoin.
As cryptocurrency networks like Bitcoin have grown, so has the mining industry: Such operations now are typically handled in big warehouses full of expensive machinery that use a lot of energy and are run by large companies.
