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8 Nov, 2021 12:53

Russia wants to tax crypto miners

Russia wants to tax crypto miners

Cryptocurrency mining should be officially recognized as a business activity and taxed, Russian media reports, citing officials.

According to the Izvestia newspaper, officials at both the Russian Economic Development Ministry and Economy Ministry believe that mining fits well with the definition of a business activity and its recognition as such would allow authorities to regulate the sphere and collect appropriate taxes.

The initiative is reportedly being discussed with representatives of the business community, with specific projects in the area already in the works.

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According to Aleksey Minaev, deputy director of the Digital Economy Development Department at the Economic Development Ministry, the crypto mining industry's recognition as a business activity would benefit both the state and miners.

This is exactly the area in which the state can receive its benefits in the form of taxes, and people can legalize their income; big business is also becoming more and more interested in this,” he stated on the sidelines of the Blockchain Life 2021 forum.

The Ministry of Energy also supports the idea, with representatives noting that regulation of crypto mining should demand that the nature of activity is registered at the stage of connecting to the power system, as the grid load is different for household consumption and mining.

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The Russian Central Bank, however, does not support the initiative, citing the risks of cryptocurrency turnover in Russia.

Russia does not ban mining, but regulation of the activity is so far rather vague. The law on digital financial assets (DFA), which came into force in January this year, does not mention the concept of ‘mining’, only a definition of  ‘issuance of digital currency’. The law defines cryptocurrency as property and allows Russian citizens to make transactions with crypto tokens, but not use them as a means of payment. They are also required to pay taxes for crypto holdings. Miners, however, are not mentioned, therefore they do not have legal status, and their activities are not licensed or taxed.

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