Originally published on: August 08, 2024
In a bold move to reduce its dependence on the US dollar in international trade, Russian President Vladimir Putin has given the green light to legislation that legalizes Bitcoin and cryptocurrency mining in the country.
Starting in November 2024, approved mining firms will be able to register through a state database to engage in crypto mining activities. Additionally, individual miners can participate without formal registration as long as their energy consumption remains below a specified threshold.
To oversee this newly legalized industry, the Bank of Russia, the Ministry of Finance, and a select group of ministers within the Russian government will establish specific regulatory requirements in the coming months. The bill also includes a ban on mass cryptocurrency advertising within Russia.
As part of the BRICS group (Brazil, Russia, India, China, and South Africa), Russia is joining other emerging economies in their efforts to move away from reliance on the US dollar for international trade. The BRICS bloc introduced the concept of an alternative digital currency at the 2019 BRICS Summit, but challenges remain in deciding how a unified currency would operate amongst member states.
Russia has refocused on developing a unified BRICS currency in 2023, with plans for special entities to utilize digital assets for cross-border settlements. However, macroeconomist Lyn Alden has expressed skepticism about the potential success of a gold-backed BRICS currency in displacing the US dollar.
In a world where “crypto is inevitable,” the decision to legalize Bitcoin and cryptocurrency mining in Russia signals a significant shift in the country’s approach to international trade and monetary policy. Stay tuned as this development unfolds and subscribe to our newsletter for the latest updates on crypto laws and guidelines.