In a groundbreaking move, Russia has officially recognized Bitcoin and other digital currencies as property for foreign trade settlements. President Vladimir Putin signed a new law under an experimental legal regime (ELR) with the aim of integrating cryptocurrencies into the nation’s economy while maintaining strict oversight.
The new law simplifies certain tax rules for crypto operations in Russia. Under the ELR, crypto transactions will be tax-free, and mining or selling cryptocurrencies will not incur value-added tax (VAT). However, mining facility operators must report client details to tax authorities or face fines of 40,000 rubles, approximately $371.
Individual crypto traders will also be subject to taxation on a tiered system. Earnings up to 2.4 million rubles will be taxed at 13%, while income beyond that threshold will be taxed at 15%. Miners, on the other hand, will classify their earnings as “income in kind,” taxed at market value with deductions allowed for mining expenses. Corporate entities involved in mining will face a 25% corporate tax starting from 2025.
The law also restricts miners and traders from accessing special tax benefits, such as simplified tax systems or agricultural exemptions, in order to ensure tighter regulation over crypto operations. This latest law builds on previous regulations introduced in August to oversee large-scale mining, limiting it to registered entities.
Amid increasing sanctions, Russia seems to be leveraging cryptocurrencies to bypass traditional financial systems. By offering tax incentives while imposing clear rules, the Kremlin is aiming to position itself as a major player in the global digital economy.
This move by Russia marks a significant step towards mainstream acceptance of cryptocurrencies and could potentially have far-reaching implications for the global crypto market. As other countries continue to grapple with how to regulate and integrate digital currencies, Russia’s approach could serve as a model for balancing innovation with control in the rapidly evolving crypto landscape.