Russia Edges Closer to Crypto Regulation as Ruling Party, Energy Ministry Push for Legislation

Crypto regulation is likely to come sooner rather than later in Russia, leading politicians hope – with the ruling United Russia party throwing its weight behind legislative proposals and the Ministry of Energy voicing its support for crypto mining.

Most of the government and the majority of lawmakers are thought to be firmly behind an updated proposal from the Ministry of Finance. The ministry has formulated a draft law that would seek to impose strict regulation on the crypto sector – both for companies involved in the space and private investors. Many ministries have had their say on the bill, first drafted in February, and MPs are now hopeful of debating it in the State Duma before the summer recess begins at the end of July.

But the Central Bank remains opposed to crypto. Although it has recently shown signs that it could be prepared to make some small concessions, it has warned that any “legalization” of crypto would lead to a creeping “cryptoization” of the Russian economy.

But Comnews reported that with United Russia’s leadership behind the bill, the Central Bank is finding itself increasingly isolated in its hardline position. Regardless, its refusal to back down easily will see key provisions inserted into the bill to the extent that “it will be virtually impossible to use” crypto in Russia.

A further wrinkle was also anticipated in the form of international sanctions: the media outlet wrote that while cryptoasset ownership will likely be legalized, major international crypto exchanges and even the “issuers of cryptocurrencies” will “block access to Russians.”

Regardless, Anton Nemkin, the head of the United Russia Party’s Digital Russia initiative, claimed that the bank and the ministry would “quickly come to an agreement,” allowing the new law to pass and become law “this year.”

Nemkin moved to allay Central Bank fears by stating that “within the framework of the proposed regulation, digital currencies are considered solely to be a tool of investment.”

He added:

“As such, we will not face the threat of a complete replacement of traditional financial instruments by cryptocurrencies.”

Nemkin added that “new projects in the field of crypto mining” were “also interesting” – claiming that such projects would help use up surplus energy, create new jobs and raise tax revenues in multiple regions.

Meanwhile, the nation’s energy ministry appears to have contradicted claims made last month about crypto mining by Russia’s Ministry of Industry and Trade. The ministry had claimed that bitcoin (BTC) and crypto miners in the country were using more energy than the agricultural sector – and that mining was now consuming 2% of the nation’s power.

But, RIA Novosti reported, the Ministry of Energy has announced that “cryptocurrency mining” accounts for “only about 0.64%” of the electricity consumed nationwide.

The ministry, which has previously spoken in favor of legalizing the mining sector, also added that the Russian energy network was “strong,” and added that an “uninterrupted power supply” was being provided to both residential and industrial consumers.

It added that the existing network would be able to provide electricity to crypto miners – provided the “appropriate legalization and regulation” was put in place.

However, the ministry claimed that firms engaged in mining should be forced to pay unsubsidized rates, rather than making use of the cut-price tariffs that providers let residential customers make use of.

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