Photo credit: Gavriil Grigorov/Russian Presidential Press and Information Office/TASS

Russian President Vladimir Putin has signed a law legalizing crypto mining in the country.

According to the state-owned news agency TASS on Aug. 8, the law dictates that only Russian legal entities and individual entrepreneurs included in a register will have the right to mine. 

Moreover, the report highlighted that individuals who do not exceed the energy consumption limits set by the Russian government will be allowed to mine without needing to be included in the register. 

Despite permitting foreign digital financial assets to be traded on Russian blockchain platforms, the report states that the Bank of Russia has “the right to ban the placement of individual issues if it finds a threat to Russia’s financial stability.” 

Russia’s latest attempt to embrace crypto comes after sanctions were imposed back on June 18 by the US Department of the Treasury due to “its continued cruel and unprovoked war against Ukraine.”

Ever since the sanctions were imposed, Russia has faced delays in international payments with its trading partners such as China, India, and the United Arab Emirates, as reported by Reuters. 

The delays in the payment have led Russia to face an 8% decline in imports in the second quarter of 2024. Russia had attempted to conduct the transactions in its partner’s native currency. However, the majority of the payments were still conducted in dollars and euros.  

The countries that trade with Russia face a risk of getting secondary sanctions, forcing them to tighten their compliance procedures, which is causing transaction delays. 

Stating the reasons behind the recent legalization of crypto mining, Putin, in a meeting with the government on economic issues, claimed that it is important for Russia "to seize the moment" and create the legal framework and regulation, to develop the infrastructure and promote the circulation of cryptocurrencies.

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