Russia legalizes cryptocurrency mining: How it helps avoid sanctions

Russia's cryptocurrency mining activities have become a key 'weapon' against Western sanctions. The country is now the second-largest Bitcoin mining hub after the United States.

The legalization of cryptocurrency mining in Russia starting November 1, 2024, aims to facilitate Russian companies in making international payments using digital currency, thereby minimizing the impact of sanctions. However, to avoid sanctions, Russia needs to balance promoting cryptocurrency mining to generate foreign exchange revenue and complying with international regulations to avoid being targeted by other countries, especially the U.S. The new law clearly stipulates mining activities, including registration and energy consumption limits, but simultaneously imposes a 15% tax on cryptocurrency mining and transactions. Russia's connection of the digital currency system with other countries like China, Iran, and Belarus also contributes to supporting international transactions, but it also carries risks. Additionally, the ban on mining in certain areas during winter to address electricity shortages is another factor to consider.