[NEWS] President Putin signs bill legalizing cryptocurrency mining

Russian President Vladimir Putin has officially signed a law legalizing cryptocurrency mining in Russia, reported Russian news agency TASS.

The law introduces new concepts such as digital currency mining, mining pools, mining infrastructure operators, address identifiers, and individuals engaged in mining activities.

Mining itself will be recognized as part of turnover, not the issuance of digital assets.

Only Russian legal entities and individual entrepreneurs registered with regulatory authorities have the right to mine, and digital currency can be mined even if they are not registered, as long as they do not exceed the energy consumption limits set by the Russian government.

According to the document, foreign digital financial assets can be traded on the blockchain platform in 2019, and the Central Bank of Russia has the right to ban them individually if it considers them a threat to Russia's financial stability.

The law also introduces a ban on large-scale cryptocurrency advertising in Russia. The aim is to suppress the high volatility inherent to cryptocurrencies by completely banning excessive advertising.

According to TASS, President Putin discussed the introduction and use of digital currencies at a meeting with government officials in July.

President Putin said that this dynamic field is becoming increasingly promising and is already changing the way trade, banking and international payments are conducted.

He further noted that "it is important for Russia not to miss this opportunity and to develop legal frameworks and regulations in a timely manner, develop infrastructure and create conditions for the circulation of digital assets in our relations with domestic and foreign partners."

Digital currencies contribute to Russia's economic development

The president emphasized the potential contribution of digital currencies to Russia's economic development, and also pointed out their contribution to international trade, emphasizing the need for appropriate regulations and infrastructure to support the growth of digital assets both domestically and internationally.

The background to the introduction of cryptocurrencies is the aim to avoid the US dollar, which is the base currency in international trade. The BRICS, formed by Brazil, Russia, India, China and South Africa, aims to reduce the use of the US dollar.

The BRICS proposed the adoption of alternative digital currencies at their 11th summit in 2019. However, they faced challenges such as differences of opinion among the major member countries regarding how to operate the common currency. China and other countries aimed to promote the digital yuan as the main currency.

So President Putin proposed to realize the idea of ​​a BRICS common currency with a digital currency. Major member countries are already developing a new currency for international trade settlement.

The goal is probably the euro, but there is a risk that the value of each country's currency will decrease as a result. It seems that they have shifted to the idea that it would be better to use existing crypto assets such as Bitcoin (BTC) rather than a common currency.

Reference: TASS
Image: Shutterstock

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