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A bill has made its way to Russia’s President Vladimir Putin, which would make cryptocurrency taxable by the Russian government. The bill has been approved by the upper house of parliament and aims to introduce tax rules to mining and crypto transactions.
While approved by the upper house, it will still need to be signed into law by Putin. The bill would see trading income from cryptocurrencies be brought under the same tax rate as trading securities. It would cap at 15%.
Mining activities would need to be reported based on the value of the cryptocurrency at the time it was mined. If Bitcoin’s booming price suddenly dropped after the receipt, the tax would take money from when it was harvested, not the new price.
However, any crypto transactions would be exempt from VAT, or value-added tax. This follows the United Arab Emirates (UAE), which introduced a similar law in October.
Russia takes action on crypto as winter power shortages loom
Russia banned crypto-mining in some Siberian regions in November, as it tackles a power shortage. The ongoing Ukraine war has seen energy infrastructure destroyed, which can be exasperated by digital mining operations putting huge strains on power grids.
Estimates put Russia’s mining power usage at around 1.5% of the total consumption in the country.
The country is currently trialing using cryptocurrency in cross-border payments, as well as attempting to build up regulations for the technology.
Cryptocurrencies like Bitcoin are currently exploding in value. Bitcoin reached a high of $99,469 before beginning to slump back to the current price of $95,000.
Close Putin ally, Donald Trump, is expected to bring in a crypto-czar when he takes office in January, a first for the USA. The incoming president has been a big proponent of the tech this time around, as more countries begin to work towards legitimization.
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