In a decisive move emphasizing its intent to regulate digital finance, the Russian government has recently enacted a law expanding state control over cryptocurrency and other digital assets.
The Russian government released an October 25 document, signed by President Vladimir Putin, which comprehensively details these new regulations. Interestingly, the new law will take effect from November 1.
New Legislation Details
The law states that the Russian government reserves the right to implement mining restrictions and define specific procedures for banning mining operations. Furthermore, the law gives the government the right to discontinue digital currency mining tools in spotlighted areas and to regulate infrastructure providers supporting mining operations.
It is worth noting that the law has expanded access to digital currency identifier addresses beyond the Federal Financial Monitoring Service (Rosfinmonitoring) to include multiple federal agencies, executive bodies, and law enforcement.
The access highlighted above will help crack down on crypto fraud by strengthening the abilities of these bodies to monitor financial transactions effectively. Consequently, it will aid in detecting money laundering-related activities or those aimed at financing terrorist activities.
Another significant change brought about by the new law is that the Federal Tax Service now oversees mining registrations for businesses and reserves the right to remove defaulters. Before now, the Ministry of Digital Development was responsible for the national mining register.
Although individuals who adhere to specific electricity consumption limits can continue without registering, companies and individual business enterprises must obey the new registration requirements if they must operate in the country.
Implications?
Russia's new crypto law is one of many efforts to develop a state-backed digital currency, the digital ruble while reducing the reliance on the U.S. dollar in international trade.
Thus far, crypto mining and cryptocurrency use are progressively becoming a mainstay in the country, with cryptocurrency options even for foreign trade. In addition, the new law aligns with the Russian government's efforts to salvage the nation's dwindling economy, which has raised considerable concerns because of the war restrictions.
