President Vladimir Putin’s administration is taking quick action to regulate the historic boom of Bitcoin. In recent developments, the Federal Committee of the House of Lords of the Russian Parliament approved a bill outlining the tax framework for crypto assets. Putin has long tried to reduce Russia’s reliance on the U.S. dollar on international transactions, and tools such as CBDC and cryptocurrencies are seen as key to achieving this goal.
Under the bill, Russia classifies virtual digital currencies as property and introduces taxes that generate 13% to 15% of personal income by cryptocurrency sales.
To position Russia as a crypto mining hub, the government has exempted cryptocurrency miners from value-added tax (VAT) for mining cryptocurrencies. Miners must comply with government regulations and report necessary information to local authorities. Violations of these guidelines may result in a fine of 40,000 (approximately Rs 30,754).
The bill has passed three books from the Russian legislature and is awaiting President Putin’s signature to become law. The final schedule is not yet clear.
The move comes after Donald Trump was elected the 47th president of the United States, after Bitcoin soared to a historic height, close to $100,000 (about Rs 84.4 lakh).
President Putin seems to believe that virtual digital assets (VDAs) like Bitcoin can help Russia recover in the economic recovery of sanctions in various countries following the February 2022 invasion of Ukraine.
Since the beginning of this year, Russia has taken several steps to regulate the virtual digital asset industry.
Back in March, Russia joined Brazil, China and South Africa – the BRICS Group – a digital payment network that plans to support digital currencies. Recently, President Putin expressed support for the initiative, highlighting that digital currencies can benefit not only BRICS countries and other developing economies.
In July this year, President Putin signed the Digital Ruble Act to help Russian citizens process payments through the Digital Ruble CBDC.
