Russian Banks Propose Tax Amendments To Cater For Cryptocurrency

Several governments and regulatory authorities around the world are developing regulatory frameworks for the adoption of cryptocurrency.

The asset class is approaching mass adoption, and governments recognize the need to assimilate it into their financial systems.

Russia has become one of the latest countries that are working towards developing the necessary frameworks for cryptocurrency.

According to reports from Russian media, the Association of Banks of Russia (ABR) has put forward a proposition to place a tax on the mining of cryptocurrency.

The association has proposed that this tax should be similar to the one the country has placed on treasures and properties.

In the association’s view, Bitcoin and other cryptocurrencies are highly valuable, and thus, the government should tax the mining of the asset class the same way they tax the finding of treasure.

Mining crypto equal to finding any other valuable product

The members of the ABR will meet on the 8th of October to discuss the document containing the proposition.

The report proposes that crypto miners be treated similarly to people who find treasure or money. These people should be allowed to exchange the crypto they gain from mining for fiat currency.

The ABR says that it could be argued that the first person who owns a crypto asset found this asset as is when someone finds a treasure.

New Bitcoin comes into existence through mining activity executed by miners. For this reason, crypto can be considered as a thing which can be used for transactions and hence can be taxed accordingly.

Entities that use cryptocurrencies should be taxed according to the profits they make under the country’s Tax Code.

Endeavor could be affected by the central bank’s position

The ABR is proposing that Russia becomes more open to crypto use, but this could be affected by the stance held by the country’s central bank.

The central bank has been less than welcoming to digital assets and once proposed that the government outright bans the use of crypto in the country.

This position would be detrimental to the measures that have been submitted by the ABR.

If the proposed tax measures are to be applied, Russia’s central bank would have to change its position as far as digital assets go.

Russia currently holds about 10% of all Bitcoin mining power in the world, and the availability of cheap hydroelectric power in the country will see more players enter this industry.

If the ABR’s proposed solutions are adopted, crypto mining will become an even bigger industry in Russia.