Russian central bank: crypto mining is okay, but under one condition

Last Updated: 1 July 2022

Russia is coming up with crypto news again. Since the sanctions imposed by various countries, the country is trying to find other ways to save itself. Bitcoin is one of the options to make Russia independent.

The country is trying to make this as attractive as possible, and one of these actions is to make bitcoin VAT-free. This is not to be nice to Russian citizens, but it is part of a larger plan. Russia sees bitcoin as a way to break its economic isolation. And that includes mining.

Only selling to foreign countries

For this reason, the country also wants to legalise the mining of crypto. This would allow miners to mine in the country freely, but there is a catch. A financial official of Russia has one requirement for these miners: the mined crypto must be sold to a foreign country. But why?

Kirill Pronin of the Russian Central Bank (CBR) has acknowledged this legalization of crypto mining under these conditions. It is remarkable that the CBR is thinking about this at all, because this bank is normally not a crypto fan.

On the other hand, payment traffic with foreign countries is limited because of the war, so Russia has to look for solutions. That could be bitcoin, but you don’t want bitcoin to turn domestic payments upside down, as Pronin saw it.

Do not motivate domestic crypto payments

The requirement for miners is therefore as follows: the mined crypto must be sold abroad. Indeed, it must not become a replacement for the rouble.

“Despite the fact that we consistently speak out in favour of the ban on the turnover of cryptocurrencies […] the discussion about the legalisation of mining is possible,” Pronin said.

“Ultimately, we have to say that there should be an export of these mining services, and the mining activities should not lead to accumulation of cryptocurrency in the country so that there will be no motivation for further use in internal payments.”

Author

  • Florian Feidenfelder is a technical analyst with many years trading experience in the stock exchange and crypto markets. He has broad experience in forex trading, coaching, and funds management.

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