Russian Crypto Mining Legislation Faces Further Delay, Lawmaker Concedes

2024-07-01 19:00:29

Tim Alper

Last updated:

July 1, 2024, 23:00 EDT | 2 min read

Russian lawmakers have conceded that a much-vaunted draft law to legalize industrial crypto mining is set for a further delay.

The news agency TASS reported that Valery Seleznev, the Deputy Chair of the State Duma’s Energy Committee, has “cast doubts” on the law’s “adoption in the fall.”

Delays Hit Russian Crypto Mining Legislation Drive

Politicians have been debating proposals to legalize industrial mining for years. This follows intense lobbying efforts from miners.

However, in their most concerted effort yet, miners have this year been pushing Moscow to legalize the industry.

Even if it means they must start paying taxes on their earnings, miners are keen to gain recognition.

Miners are confident that securing official recognition as a government-approved “form of entrepreneurship” will help attract more domestic investment to their sector.

But Seleznev suggested that, despite reports to the contrary, divisions remain in Moscow.

The lawmaker said that “more clear approaches” were needed to explain “the need for mining” and “the development of technologies related to the production and circulation of cryptocurrencies.”

The Russian State Duma in session. (Source: Duma.gov.ru [CC BY 4.0])Seleznev claimed that the State Duma “will not approve the mining bill” in the current parliamentary session.

He added that “it may not be adopted in the fall session either,” and explained:

“I am sure that the Duma will not adopt [the bill] after taking into account comments of a legal and technical nature we received about a month ago. However, [given the nature of the comments], it may also not be adopted in fall either.”

Seleznev was speaking at a meeting of the Russian Union of Industrialists and Entrepreneurs’ Electrical Power Commission.

Russian oil and gas revenues set to rise by 50% y/y in June, Reuters calculations show

— Reuters Energy and Commodities (@ReutersCommods) June 25, 2024

The lawmaker added that miners needed to make “guarantees” about power consumption, likely in response to concerns raised by energy industry officials.

However, the lawmaker said he expected “the problem to be resolved” at some stage in the future.

Will Miners Have to Pay for Electric Grid Infrastructure Changes?

The lawmaker also said he expected miners to help “pay for the construction” of a “new generation” of improved power networks.

Such a network, he suggested, would better suit the needs of Russian crypto miners. Late last month, Russian power industry officials stated that crypto miners in the country want to bring 6.9 GW worth of capacity online.

Officials think the nation’s cumulative crypto mining capacity currently stands at 2.7 GW. Industry chiefs say the Russian industrial crypto mining sector is now second only in size to that of the USA.

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