Russia has initiated a national system aimed at regulating the use of mining equipment in the cryptocurrency sector, focusing on minimizing illegal cryptocurrency mining operations. This endeavor is a joint project by the Energy, Digital Development, and Federal Tax agencies targeting the regions known for their extensive mining activities. The system is designed to meticulously measure the electricity consumption of various mining facilities, thereby establishing a foundation for improved taxation and regulation. RIA Novosti, a state agency, reports that the ultimate goal is the complete eradication of unregistered cryptocurrency mining.
What Does the Equipment Registry System Offer?
The registry system, initially a proposal by the Ministry of Energy, aims to eliminate illegal mining operations which burden the electrical grid. This comprehensive database contains detailed information on each piece of equipment, including model numbers and watt values. Such details allow electricity distribution companies to track usage in real time. The tax authorities then compare these insights with miners’ income declarations, ensuring proper taxation and preventing tariff exploitation.
Currently operational in regions with high hash rates such as Irkutsk, Krasnoyarsk, and Yakutia, the system is slated for nationwide rollout by the end of the year. This move will effectively make unregistered cryptocurrency mining impossible in Russia.
Why Are Regional Bans Being Imposed?
Ahead of this system’s launch, Russian authorities imposed a six-year ban on crypto mining in power-deficient areas to prevent potential outages. This ban affects six regions and remains in effect until March 15, 2031. This is part of a broader initiative which also includes a new portal for miners to declare their earnings online, aligning with President Vladimir Putin’s tax policy set to commence in 2025.
Additionally, new legislation by the Ministry of Digital Development empowers courts to seize mining equipment and unregistered cryptocurrencies. Companies found repeating offenses may face fines up to 2 million rubles, approximately $22,000. Through these measures, Russia seeks to assert greater state control over significant hash power networks such as Bitcoin.
The nationwide crackdown on unauthorized cryptocurrency mining introduces:
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A registry system to monitor and regulate electrical usage of mining devices.
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A strategic ban on mining in regions with power limitations.
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Legislative action against repeated offenders in the mining sector.
Russian authorities believe these measures will secure energy resources more effectively and align the crypto mining industry with national laws. With the registry system as its central strategy, Russia aims to safeguard its electrical grid while ensuring legitimate and fair practices in cryptocurrency mining. As the system expands, the nation takes a significant step in regulating the cryptocurrency sector.
