Here’s how Russia’s law to legalize crypto mining could affect the Bitcoin price
- New Russian bill seeks to legalize crypto mining, sales under new “experimental legal regime.”
- A bill was introduced in the Russian State Duma on November 17, which sought to legalize the mining and sale of mined cryptocurrency.
- Anatoly Aksakov, head of the Duma Financial Markets Committee believes that the bill is likely to enter into force on February 1.
A new bill was proposed in the lower house of the Russian parliament regarding cryptocurrency mining. The bill proposes the legalization of cryptocurrency mining and the sale of mined crypto on November 17.
The sale of Bitcoin and mined cryptocurrencies by Russians could increase selling pressure on the asset.
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Russian law could legalize crypto mining in 2023
A new cryptomining law was introduced in the lower house of the Russian parliament on November 17. The bill proposes to legalize the mining of cryptocurrency and the sale of the mined digital assets.
Cryptocurrencies cannot be used to settle payments in Russia at this time. However, the draft of the new bill seeks to legalize crypto mining and sales under an “experimental legal regime.”
The proposal for a bill reads:
Digital currency obtained as a result of mining may be disposed of by the person who performed the mining of this digital currency on the condition that Russian information infrastructure is not used to carry out transactions with it, with the exception of cases of transactions carried out in accordance with the established experimental legal regime.
Russian law on cryptomining may be adopted as early as 2023
Anatoly Aksakov, head of the Duma Financial Markets Committee told local press that he expects the proposed bill to pass all three parliamentary readings in December 2022. The bill could enter into force as early as February 1, while other sources believe it could become a law as early as 1 . January.
Adoption of the law will bring this activity into the legal field, making it possible to form a law enforcement practice in matters related to the issuance and circulation of digital currencies.
This draft bill was made possible by the Digital Innovation Law passed in 2020. The bill introduces and defines cryptocurrency mining and mining pools, and prohibits the advertising of digital assets in Russia.
Bitcoin price may crumble under selling pressure
If the new Russian mining bill becomes law, there is a likelihood that miners will sell their digital assets on exchanges. This would involve miners transferring Bitcoin to cryptocurrency exchanges to sell it for fiat currencies or exchange it for other cryptocurrencies.
An increase in the supply of a cryptocurrency on exchanges increases selling pressure on it, negatively affecting its price. The Bitcoin price may be negatively impacted by the increasing balance on exchanges, and the sale of BTC by Russian miners.