Putin Expands Crypto Mining Control in Russia with New Law Effective November 1

On November 1st a new law will come into effect in Russia signed by President Putin which will give the government much more control over cryptocurrency mining and related activities. The law introduces strict regulations that will allow the government to ban mining based on regional and strategic reasons.

The law allows authorities to designate areas where mining is restricted or banned. It also gives the government control over infrastructure providers that support mining. Notably the Federal Tax Service will now manage the national mining register, instead of the Ministry of Digital Development.

For businesses and entrepreneurs that mine, registration is mandatory, repeat offenders will be deregistered and banned from operation. Individual miners can mine without registration as long as they stay within the electricity limits.

• Effective Date: November 1
• New Authority: Federal Tax Service to manage mining register
• Regional Controls: Mining banned in designated areas based on regional needs

Increased Surveillance and Financial Monitoring

The new law not only tightens mining control but also gives federal agencies access to digital currency identifiers. Previously only the Federal Financial Monitoring Service (Rosfinmonitoring) had this ability. Now multiple federal agencies will be able to track digital currency transactions to identify activities related to money laundering or terrorist financing. This is in line with Russia’s goal to monitor and control digital currency within its borders.

This is part of Russia’s overall plan to create a full fledged crypto regulation and develop its digital ruble, a state backed digital currency.

• Surveillance Expansion: Multiple federal agencies can now track crypto transactions
• Purpose: Better monitoring for financial crimes
• Digital Ruble: Part of Russia’s national digital currency

Russia’s International Crypto Plans

In addition to strengthening internal regulations Russia is positioning itself to use crypto in international trade to circumvent Western sanctions and reduce dependence on the US dollar. Earlier this year Russia allowed large scale crypto mining for registered companies and legalized the use of crypto in specific international transactions. In August the Bank of Russia launched an experimental framework for cross border crypto payments which requires oversight from the Finance Ministry, Federal Security Service and Rosfinmonitoring.

The law allows for some legal adjustments for international crypto transactions, Russia is using crypto globally especially in coordination with BRICS (Brazil, Russia, India, China and South Africa) to reduce its dependence on the US dollar.

• International Trade: Russia using crypto to bypass sanctions
• BRICS: Exploring digital currencies for global investment
• Strategic Goal: Reduce US dollar in international transactions

This is all part of Russia’s plan to become a major player in the digital asset space both domestically and internationally.