The Russian Ministry of Finance has expressed support for the proposal to officially recognize cryptocurrency mining under the All-Russian Classifier of Types of Economic Activity (OKVED), reported “Izvestia“. The OKVED mine may either fit into an existing code or receive a new one – a detail that the Ministry of Economy is currently studying, according to Osman Kabaloev, Deputy Director of the Department of Financial Policy.
With OKVED recognition, in the foreseeable future, mining will be a regulated economic activity. The OKVED code for a company type is stated at the time of business registration and may influence the need for licensing, insurance fees, and the possibility of state benefits. For legal acceptance of cryptocurrency mining, however, a regulation law has to be enacted first. The query about the OKVED code is being processed by the Ministry of Economic Development, which may consider a new code or include mining into an existing one, explained Kabaloev.
The potential for regulation law came to light in March, initiated by the Ministry of Energy. With no legal basis for mining currently in place, the introduction of a regulation law will fix the status, copyrights, and responsibilities of the mining companies and define mining and handling rules for cryptocurrencies. The Ministry of Industry and Trade noted that these laws could be approved by August 2024. They suggested that as an economic and technological operation, cryptocurrency mining is closer to industrial activities. The Association of Industrial Mining proposed that this activity should be included in the “Processing Production” section.
Cryptocurrency mining is already regulated in many countries. For instance, in Iran, it falls under regulatory control, while in Hong Kong, Taiwan and Canada, cryptocurrency is considered a commodity. Experts consulted by “Izvestia” believe that legal recognition and assigning an OKVED code would divide this function into industrial and illegal. Legalization would simplify electricity network load planning and increase tax revenue collection. Russia mined cryptocurrencies worth an estimated $5 billion last year, which could potentially generate tax revenue of around 50 billion rubles after 2025.
Mining operations are currently easier for those who prefer to work in the shadows, posing threats to the energy security of entire districts. However, some companies still strive to carry out their activities openly despite the lack of a legal framework. Legalizing industrial mining would make it significant on the global market, second only to that of the United States. Russian businesses could use cryptocurrency for international settlements with counterparties in countries where it’s legally recognized.
