Taxes, higher electricity prices for Russian Bitcoin miners

Source: Adobe / Andrey Popov

The parliamentarian tasked with creating Russian crypto regulation has hinted that the crypto mining tax may come – as the days of rock bottom energy for miners across the CIS region seem to be drawing to a close.

Per Finworld, Anatoly Aksakov, head of the State Duma’s Financial Markets Committee, told participants at a fintech summit:

“[Russians] are not banned for mining, but regulation of this sector has not yet been clearly implemented. The question of taxation in this sector must be correctly formulated in the legislation. “

Across the border in Belarus, miners are already paying higher rates than individuals, despite the government taking a pro-mining and crypto stance. Legislators in other parts of the region could turn to Minsk for advice on introducing special tariffs for crypto miners.

Some industry representatives welcomed the move, but indicated that other “stumbling blocks” may lie ahead. Dmitry Machikhin, the CEO of the crypto accounting service Bit analogsaid

“I think Aksakov is right – although the time has come earlier than he predicted. The bill on crypto taxes is still in the Duma after passing its first hearing. Anyway, the issue of crypto taxes is that Russia is another stumbling block when it comes to crypto regulation and adoption. It will require a lot of effort from the authorities. “

Aksakov also stated that “serious work” needs to be done on crypto-related legislation that has so far not been done in any meaningful form – mainly due to a political impasse. The government is in the middle of a tug-of-war between pro-business interests and vehement anti-crypto Central bank.

Aksakov said the central bank is considering crypto and blockchain-related “proposals” from three of the country’s largest companies: the metals company Norilsk Nickel, the railway giant Transmash holding and the banking and tech giant Sberbank.

Lawmakers may have spoken in the same vein as Deputy Minister of Industry and Commerce Vasily Shpak, who asked the Ministry of Digitization and the central bank for feedback on crypto-related proposals from oil companies, according to Kommersant.

The companies reportedly want to allow crypto miners to work on oil pumping stations and use excess flare gas to power their drilling rigs.

Meanwhile, reported yesterday that Kazakhstan is now on the verge of introducing a new, higher tax rate for miners after “emergency shutdowns” were reported at three of the country’s power plants. A sharp increase in crypto mining, some think, is already putting a strain on the power grids.

And provincial chiefs in Russia have also complained in a letter to Moscow that they are also struggling with increased electricity consumption, with the guilt again being directed at the miners. The central government’s energy decision-makers responded by claiming that miners might soon be forced to pay higher prices for their electricity.

Although the police can prosecute miners for illegally using electricity resources for industrial use or for stealing electricity from the grid, the officials are powerless because mining and crypto assets do not have a clear legal definition in Russian law.
Learn more:
– The US becomes the largest Bitcoin mining hub after China’s miner exodus
– Nordic bitcoin miners face a double challenge, but the industry is still “pretty optimistic”

– Dominated by institutions, Bitcoin mining is also possible from home
– How Bitcoin Mining Could Help Nations With Domestic Energy Production

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