Russia needs to legalize the domestic exchange of cryptocurrencies, the head of the sanctioned country’s tax authority has suggested.
Russia’s recently regulated crypto mining industry is currently selling most of the coins it mints abroad and this is impeding its development, the tax executive noted. His call to allow crypto sales comes amid ongoing discussions in Moscow on the launch of Russian trading platforms for digital assets.
Tax chief urges crypto trading infrastructure in Russia
Russia should build its own infrastructure to facilitate the sale of cryptocurrency inside the country, the head of its Federal Tax Service (FNS), Daniil Egorov, stated in an interview, quoted by Russian business and crypto media outlets.
Speaking to the Russia 24 TV channel during the St. Petersburg International Economic Forum (SPIEF), Egorov argued that since cryptocurrency mining has been legalized, it’s only logical to provide crypto miners with the opportunity to legally sell their digital coins locally.
Russian miners are now forced to sell their cryptocurrency “abroad, in the virtual world.” Having this option at their disposal in the Russian Federation is very important from the point of view of their development, the executive insisted, elaborating:
“Naturally, there must be some kind of infrastructure on the territory of Russia, so that if they mined it legally, they could sell it legally.”
Egorov went on to point out that it sounds strange to tell mining firms they can’t do anything with what they’ve mined if the Russian state has allowed them to mine already. “You need to be consistent, that’s how it seems to me,” he remarked.
Around 1,000 companies and individual entrepreneurs, as well as 2,000 private citizens, are already involved in mining, he detailed. Earlier this year, the FNS said that, as of April 1, it had 722 entries in its registry for miners, including 116 “mining infrastructure operators,” providing hosting services.
The head of the authority is convinced the numbers will grow. He admitted, however, that bringing the whole industry out of the shadow economy is not easy, reminding that miners who consume less than 6,000 kWh of electricity monthly are not required to register with the FNS.
More than two-thirds of Russian crypto miners have yet to apply for registration with the tax-collecting body, Deputy Finance Minister Ivan Chebeskov unveiled this week. So far, only 30% of all participants in the sector have registered with the Federal Tax Service, he told Tass on the sidelines of the economic forum in Russia’s second-largest city.
Financial regulators consider launching Russian crypto exchanges
Speaking to RBC separately, Chebeskov revealed that the Ministry of Finance and the Bank of Russia are now discussing the legalization of crypto trading platforms, initially within Russia’s experimental legal regime (ELR) for cryptocurrency operations.
The ELR was proposed as part of legislation adopted last year to facilitate the use of cryptocurrencies in foreign trade, as Western sanctions over Moscow’s invasion of Ukraine have severely limited access to the global financial system for Russian businesses.
The Minfin official noted that while Russian investors can already buy crypto derivatives, there’s no infrastructure in Russia to support the trading of cryptocurrencies. He also remarked that, at this point, the authorities are considering using existing exchanges for that purpose.
Chebeskov also emphasized that the financial regulators share the view that cryptocurrency trading should be available only to “highly qualified” investors, elaborating:
“These must be investors with serious knowledge, understanding of these products and serious capital so that they can take such risks.”
At the same time, he admitted that ordinary Russians use cryptocurrencies on a fairly large scale, and any ban now would have a negative effect, highlighting that the main issue is what to do with crypto exchanges outside the ELR.