Russia’s new crypto law amplifies state control, enabling regional restrictions, tighter infrastructure regulations, and enhanced transaction monitoring.
State Authority Over Digital Currency Grows as Russia Publishes New Law
The Russian government released a document on Friday detailing a law signed by President Vladimir Putin that broadens the scope of digital currency regulations. This new law significantly extends government oversight of cryptocurrency mining activities and related infrastructure across the nation.
Taking effect on Nov. 1, the legislation includes several amendments designed to strengthen oversight and impose limitations on crypto mining activities based on regional needs. The law enables the Russian government to implement mining restrictions by location and define specific procedures and circumstances for banning mining operations. A notable provision in the law gives the government the power to stop digital currency mining pools from functioning in certain areas. Additionally, the government now has the authority to regulate infrastructure providers supporting mining operations.
This legislation also grants multiple federal agencies, beyond the Federal Financial Monitoring Service (Rosfinmonitoring), access to digital currency identifier addresses. This expansion includes federal executive agencies and law enforcement, bolstering their capability to track transactions that may be linked to money laundering or terrorist financing activities.
Moreover, the amendments transfer responsibility for the national mining register from the Ministry of Digital Development to the Federal Tax Service, which will now oversee mining registrations for businesses and remove those with repeated infractions. While individual miners can continue without registering if they adhere to specific electricity consumption limits, companies and individual entrepreneurs must comply with new registration requirements.
In its approach to digital currencies, Russia is advancing crypto regulations and developing a state-backed digital currency, the digital ruble. The country has legalized crypto mining and permitted cryptocurrency use in international trade, aiming to bypass sanctions and reduce reliance on the U.S. dollar in foreign exchanges. Putin signed legislation in August allowing experimental frameworks for cryptocurrency use in international transactions. This law enables legal adjustments for cross-border crypto transactions, placing oversight of pilot projects with the Bank of Russia and requiring approval from the Finance Ministry, Federal Security Service, and Rosfinmonitoring.
