N RUSSIA IT WILL BE DIFFICULT TO BAN BUT EASIER TO TAX

In Russia, the situation regarding the adoption of digital currencies, as mentioned in previous articles, is in flux.

The ongoing conflict has highlighted the usefulness of digital currencies for both sides of the dispute.

In the last few days, the statements made by the former Russian President and current Vice-President of the Security Council, Dmitry Medvedev, have been very different from those made by the President of the National Bank, Nabiullina.

Although Medvedev understands the Bank’s reasons, he believes that a ban would have the opposite effect.

A few days ago, President Putin said that there would be competitive advantages in crypto mining in Russia due to the surplus of electricity and the expertise of the personnel available in the country.

 The words take into account the fact that Russia has become one of the most important places where bitcoin mining takes place, so much so that according to Cambridge University data updated in August 2021, the Russian Federation holds 11.23% of the total bitcoin hashrate, which has grown significantly from 5.9% in September 2019.

Better than Russia are the USA and Kazakhstan, which are considered the miners’ chosen shores after China’s ban.

It will be up to the Russian Parliament to find a solution with the Central Bank to find a position that can balance different needs and determine a regulatory proposal that cannot disregard the fact that the Russian people hold digital currencies worth $214 billion, or 12% of the entire global cryptocurrency market.

Russia is also the country, after India and the US, with the highest number of holders of digital currencies with over 17 million people and the second highest percentage with 11.91% of the population behind Ukraine with 12.73%.

The existing bill, submitted by the Ministry of Finance before the military operation in Ukraine, would allow cryptocurrency mining to become a “new type of economic activity“, distinguishing so-called “home mining” from industrial cryptocurrency mining.

Recalling that cryptocurrencies were previously banned as a form of payment, Andrey Turchak, the secretary of the United Russia General Council suggested that a solution could be found in the idea that digital financial infrastructure is a full-fledged part of the financial system”.

If technological solutions were developed ‘within the law’, i.e. without overstepping boundaries, new and modern tools would be provided to Russian citizens.

In the end there will be no ban, but there will be taxation. This is how it will end: easier and more profitable.