Page 24 - bne IntelliNews monthly magazine September 2024

24 I Companies & Markets bne September 2024
"Therefore, the creation of a special regulatory regime in the space that does not impose sanctions, the BRICS countries, Hong Kong, the UAE, will allow Russian business to solve
a large number of transactional problems in international relations," he concluded.
The BRICS group of countries, which includes Brazil, Russia, India, China and South Africa, could be the most promising area for mutual payments in crypto, according to CBR deputy chairman Alexei Guznov.
Meanwhile, in June 2024, there were reports that the crypto company Ripple could be a potential player in the development of BRICS Pay, a digital payments platform created by the BRICS countries.
“Under the bill, the government
will be able to ban cryptocurrency mining in certain regions, which could seriously hit Russia's leading cities in mining”
Miners under tight scrutiny
The adopted law also legalised crypto mining in Russia.
As stated in an explanatory memorandum, the measure
will make it possible to declare income received and
the payment of taxes. Only legal entities and individual entrepreneurs will be able to engage in mining after they have been included in a special register. Otherwise, they will be allowed to continue working, but will be prohibited from exceeding the established limits of energy consumption.
Miners will be obliged to provide their wallet addresses and information about transactions to government agencies, as well as to report on the cryptocurrency received to Russia's state financial watchdog Rosfinmonitoring. The same agency will maintain a list of addresses through which money laundering or terrorist financing is alleged to have been carried out.
Meanwhile, Russia's president Vladimir Putin recently blamed miners for electricity shortages, particularly in the regions Buryatia and Irkutsk. Earlier, Russia's Ministry of Energy proposed to increase tariffs for miners five to ten times to avoid shortages.
Under the bill, the government will be able to ban cryptocurrency mining in certain regions, which could seriously hit Russia's leading cities in mining.
"Miners are the most stable customers who consume electricity, they pay on time, they consume electricity in an even way, they have no surges," Vladimir Smerkis, former director of the Binance crypto exchange in the CIS, told Kommersant.
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"If the government has the task of selling electricity to a stable client, of course, if there is no shortage in a particular region, I do not see any obstacles here," he went on to say. "In general, it is better not to restrict, but to regulate, to make an economically beneficial model where miners will be able to work, and the state will be able to receive various benefits for itself in the form of deductions."
Thanks to low electricity tariffs, Russia ranks second in the world in terms of crypto mining. Last year, the country mined $3.5bn worth of Bitcoin. By comparison, the United States, the market leader, mined almost $9.5bn worth of Bitcoin.
Digital ruble gains momentum
Simultaneously, the digital ruble, which is technically not crypto but is often mentioned in the crypto context, is soon expected to be launched in Russia, allowing the Russian government to tightly control people’s payments.
In late July, the CBR said it intends to move to the mass introduction of the digital ruble from July 2025.
"We are already discussing the terms of the experiment
with ministries, agencies, with business," CBR head Elvira Nabiullina was quoted as saying by the Russian news agency Interfax. "And we expect that the first such payments will take place by the end of this year."
She added that "literally in a month" the CBR plans to increase the number of lenders participating in the pilot project on
the digital ruble. "If everything continues to go according to our plan, we will successfully implement the pilots, we will
be able to move from the pilot to the mass implementation of the digital ruble from July 2025," she concluded.
Meanwhile, support for the idea of the digital ruble recently also came from president Vladimir Putin.
"Now it is necessary to take the next step, namely, to move to a wider, full-scale introduction of the digital ruble into the economy, into economic activity and into the sphere of finance," he said at a recent government meeting on economic issues.
The digital ruble is a digital form of the Russian national currency, which the Bank of Russia plans to issue in addition to existing forms of money. One cash ruble is equal to one digital ruble.
CBR first deputy governor Olga Skorobogatova recently said that the regulator will expand the project to pilot the digital ruble from September 1. She added that the pilot project had been launched among 12 banks, with 19 more lenders in line to test the digital ruble.
The law on the digital ruble was adopted in the summer of 2023. In December of that year, the regulator said that the full-fledged implementation of the digital ruble will not begin until 2025.