End of 2024 Russian Crypto Laws Update

Since the recent crypto currency legislation was signed into law in Oct 2024, the Russian digital assets market has been developing quickly. Various experimental statutes have been activated and now the Russian Federation has become a beacon to other BRICS+ nations regarding what crypto currencies can do, especially for the Kremlin's priority of de-dollarizing all BRICS international trade. An agenda shared not only with China that finds itself locked in Cold War 2 with Washington, but also Turkey, which faces U.S. sanctions for its policies toward the Syrian Kurds.

Western media continues to try and spin Russia's measured approach to adopting Bitcoin and other cryptocurrencies in a negative light, but their coverage comes off sounding like cope.

See previous article in this series from August 24, 2024:

Russian BTC Mining Legislation Becomes Law, Moscow and St Petersburg Crypto Exchanges Coming Soon

Crypto Mined in Russia is Now Accepted for Payments

Russia has legalized accepting locally mined cryptocurrencies as international payments for purchases, fully bypassing Western sanctions, Finance Minister Anton Siluanov told the Russia 24 TV channel in an extensive interview. This has sent shock waves through the Western nations as the only sanctions that had much effect have been the financial ones, that have kept interest rates stubbornly high for the past nearly three years of the Special Military Operation.

Companies can get authorization from the government to use crypto for payments and are expected to continue expanding their usage of digital assets for transactions, "As part of the experimental regime, it is possible to use bitcoins, which we had mined here in Russia," said Siluanov.

Ukraine has now threatened Russia with fresh sanctions to punish Russians for using crypto currencies and ditching the dollar of Kiev's masters in Washington. I am sure there are psychological task forces in the Russian Finance Ministry talking scared and shocked executives down off the ledges.

It's become obvious that Russia with its massive Soviet-legacy reserves of cheap and abundant Siberian hydropower and gas-fired electricity will lead the future of crypto mining. Necessity is the mother of invention (or adaptation in this case). Using BTC to establish thriving markets for gold without any need for transacting in dollars or euros is also an area where Russia is poised to excel, in concert with its partners like the UAE and Saudi Arabia in the Gulf.

Banning Mining in Select Russian Regions

Starting with 1 January 2025 and lasting till 15 March 2031 mining will be banned in ten Russian regions for lack of sufficient surplus electricity. This list aligns with the new Crypto currency laws that went into effect in autumn. The territories affected are Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, plus the newly re-annexed Russian regions of Donetsk and Lugansk, Zaporizhia and Kherson in the former southeastern Ukraine. The ban includes both corporate and private individual mining activity.

See also: Special Economic Zones in Russia: What Are They? and Territories of Forward Development in the Russian Federation

Additionally, three other regions will have seasonal restrictions for winter, when electricity usage is at all time highs: certain areas of the Irkutsk, Buryatia and Zabaikalsky regions. Krasnoyarsk Krai and the outskirts of Krasnoyarsk the second largest city in Siberia where large-scale crypto mining is well-underway, is a notable exception.

Abkhazia, Crypto Mining No More

In the past 10 years, Abkhazia became a center for mining, though this was done by various local organized crime clans. This was done using cheap Russian electricity that Russia subsidized. However, due to the Abkhaz refusing to guarantee Russian businesses protection from the local mafia, the Russian government has cut all subsidies to Sukhumi. What that translated into is Sukhumi having to try and finance its own budgets.

Very quickly it was discovered that the Abkhaz government did not have the means not only to pay salaries and pensions but to pay for electricity for more than two more months. Mining, a massive sinkhole for electricity, has been strictly banned. This could accelerate the trend toward Moscow and the Georgian Dream government in Tbilisi negotiating a peaceful return of Sukhumi to federated Georgian sovereignty--which would be a humiliating blow to the neoliberal Western asset comprador members of the Georgian opposition.

We will continue to monitor the development of Crypto in Russia and keep you, our dear readers informed. History is being made before our eyes.

To find out more about digital assets opportunities in the Republic of Georgia and other Eurasian countries, contact us: Stanislav@exitstrategy.world