Russia Takes a Step Forward: Proposal to Classify Cryptocurrency Mining as an Industrial Sector Under Consideration

In a major move to regulate the cryptocurrency industry, BitRiver, the largest data center operator in the Russian market, has submitted a proposal to the Ministry of Industry and Trade. The proposal seeks to classify cryptocurrency mining as an industrial sector. Consequently, the industry would be assigned a code under the All-Russian Classifier of Economic Activities (OKVED).

The initiative has received support from the State Duma Committee on Financial Market. In fact, the committee announced that the proposal would be included in a broader bill on industry regulation, set for adoption later this year. According to the Ministry of Economic Development, the classification will become possible once a regulatory framework is in place.

Assigning an OKVED code to cryptocurrency mining will have far-reaching consequences. For one, it will dictate the need for a license and affect taxation rates. Essentially, taxes will be levied on the sale of digital currency. Moreover, the industry would be subject to state regulations and benefits similar to other industrial sectors.

Oleg Ogienko, BitRiver’s director for interaction with government agencies, stressed the importance of the move for the sector’s growth. Specifically, the classification will help in planning for the development of the electric power industry, which is essential for the energy-intensive crypto mining activities. Ogienko also indicated that the proposal will lay down the groundwork for proper taxation.

Anatoly Aksakov, head of the State Duma Committee on Financial Market, reiterated that the initiative is already up for government approval. He emphasized the need for legal frameworks around the rapidly growing industry. Aksakov noted that many companies are willing to operate within the law, making the adoption of regulations urgent.

The Ministry of Economic Development confirmed that they would support the change in the OKVED classifier once a regulatory framework is approved. The Central Bank also indicated its involvement in shaping regulatory approaches to mining.

In a nutshell, the proposed classification and subsequent regulation of the cryptocurrency mining sector show Russia’s aim to bring the burgeoning industry into the mainstream economy. The move could serve as a precedent for other nations grappling with the fast-paced developments in cryptocurrency mining.

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