Russia's State Duma has passed bills legalizing Bitcoin mining and establishing an experimental regime for cross-border settlements.
Russia's State Duma has passed two critical bills that aim to integrate Bitcoin into its financial system amidst ongoing Western sanctions. According to a policy expert cited by CoinDesk and reports by Ria Novosti, the new legislation was approved on Tuesday.
The first bill, set to become law on November 1, 2024, formally legalizes Bitcoin mining in Russia. Under this law, legal entities and individual entrepreneurs registered with the Ministry of Digital Development will be permitted to mine Bitcoin. However, unregistered entities can only operate mining rigs under certain energy consumption limits. The law assigns oversight responsibilities to various institutions, with the Bank of Russia holding predominant authority. Mining operations must also report the Bitcoin they mine to a government-authorized body.
The law grants the authorized body and the central bank the power to impose restrictions or bans on Bitcoin transactions. Additionally, it introduces a prohibition on advertising and offering digital currencies to an unlimited audience.
The second law, effective from September 1, 2024, establishes an experimental regime that allows the Bank of Russia to authorize selected companies to engage in cross-border settlements and exchange trading in Bitcoin. Companies interested in participating in this experimental regime must apply to the central bank. Anti Danilevski, founder and CEO of Kick Ecosystem, provided insights on the scope of the experiments, which include use in foreign trade settlements, exchange trading, and operations on an electronic platform based on the National Payment System (NPS).
Furthermore, Reuters reported comments from Elvira Nabiullina, the central bank's governor, indicating that Russia plans to initiate its first international Bitcoin payments by the end of 2024. This initiative is a response to the difficulties faced due to Western sanctions that have caused delays in international payments. The new law awaiting approval in the lower house of parliament is expected to come into force this autumn, allowing Russian companies to use Bitcoin in international transactions.
Nabiullina highlighted the central bank's readiness to exhibit flexibility in discussing the experimental conditions with ministries, agencies, and businesses. She pointed out that while businesses are finding ways to navigate the payment challenges, the resulting longer supply chains and increased costs are significant hurdles for the Russian economy.
