The time has come to fast-track crypto mining regulation, a leading Russian lawyer has advised – even if this means removing the Central Bank from the equation.
The bank is opposed to all forms of crypto, including mining – and has proposed two recent bills that seek to outlaw crypto ownership, mining and transactions made using tokens on Russian soil. However, the war in Ukraine – and the West and its allies’ sanctions have made crypto a much more pressing matter for Russia.
Although the Central Bank has been too busy fighting conventional economic fires in recent days to debate crypto regulation with the more moderate Ministry of Finance, the bank has traditionally dug its heels in on the matter, slowing the progress of crypto regulation despite calls for urgent legislation.
Prior to the Ukraine war, even president Vladimir Putin had attempted to intervene, with the Russian crypto mining industry showing growth in recent years.
But Maria Agranovskaya, a managing partner at the Moscow Bar Association-affiliated Grad Legal & Financial Advisory Services and a member of the working group on the regulation of cryptoassets at the State Duma (Russia’s parliament), told the Krasnoyarsk Economic Forum that “in Russia, regulations pertaining to “cryptocurrency and mining” were “needed right now.”
She suggested that the “long process” could be cut short by “removing cryptocurrencies” from the remit of the Central Bank and appointing other bodies to oversee the sector, such as the Ministry of Energy or the financial regulator Rosfinmonitoring. These bodies, she noted, have already come up with concrete proposals to regulate the industry.
Agranovskaya was quoted by Vedomosti as stating:
“The [government] has already banned the sale of goods and services to Russian individuals in exchange for cryptocurrencies, but there is no reason to prohibit the development of technologies and new financial instruments [that make use of] these technologies. This is an unreasonable position.”
She claimed that by removing the Central Bank from the picture, the body charged with policing the sector would not even have to pass a law in order to get the ball rolling with regulations, and could instead issue guidelines and by-laws that did not require a vote in the Duma.
The legal expert stated:
“Today, you don’t even need to wait for a law, which, in principle, should be prepared in parallel [to guidelines. It would be necessary to prepare several by-laws that can be adopted […] to form real legal foundations [for the industry].”
She emphasized that the legislation would eventually need to “clearly define” the terminology associated with crypto, defining what “mining, data centers, and mining pools” were, as well as outlining how the sector should be taxed. Agranovskaya added that it would also be helpful to “develop incentives at the regional level” in order to “support” this “form of industry.”
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