The Russian government has approved sweeping amendments to its crypto taxation framework. This development comes as the country aims to balance the interests of miners, businesses, and state authorities.

These changes reflect a growing effort to regulate the growing digital currency sector while addressing economic and infrastructural challenges. 

Key Crypto Taxation Changes in Russia

Under the revised bill, cryptocurrency will now be classified as property for taxation purposes. Income from mining activities will be taxed based on the market value at the time of receipt. Notably, miners can deduct expenses incurred during the mining process, offering some relief to this capital-intensive industry. 

The government has also clarified that cryptocurrency transactions will be exempt from value-added tax (VAT). Instead, earnings from such transactions will be included in the same tax base as securities. This will cap the personal income tax rate on crypto-related income at 15%. 

“As a result of discussions with businesses, a decision was made on the advisability of taxing the financial result from mining as the fairest reflection of the results of this activity. This approach is aimed at observing a balance between the interests of businesses and the state,” Interfax reported, citing the Finance Ministry.   

This revision comes as the government moves to tighten control. This was seen with President Vladimir Putin’s recent signing of a law transferring oversight of the crypto mining registry to the Federal Tax Service (FNS).

Industrial miners are now required to register with the FNS, while individual miners working from home remain exempt if their energy consumption stays below specified thresholds.

As of November 1, cryptocurrency mining is restricted to registered businesses and entrepreneurs. Individual miners face a monthly electricity usage cap of 6,000 kilowatt-hours (kWh), highlighting the country’s efforts to manage the energy demands of crypto mining.

The FNS has also proposed a controversial two-stage tax system, including taxes on unrealized gains — the cryptocurrency that miners hold but have not yet sold. While this move aims to ensure tax compliance, it could complicate miners’ operations, especially during market downturns. 

Beyond taxation, Russia is confronting the challenges of crypto mining’s energy demands. From December 2024 to March 2025, energy-stressed regions will see temporary mining bans imposed. While there are many such regions, some of them include Irkutsk, Chechnya, and the Donetsk People’s Republic (DPR).

Calculated Push Towards Regulation

These measures, driven by concerns over subsidized electricity and regional shortages, highlight the government’s struggle to balance crypto’s economic benefits with its energy demands. 

“Russia’s Energy Ministry is clamping down on mining rigs in energy-stressed zones like Irkutsk, Chechnya, and DPR. Reason? Subsidized power + limited juice = a tightrope of priorities. The takeaway’s clear: energy ≠ infinite, and miners might need to get stealthy or pivot,” commented Mario Nawfal on X.

Amid these regulatory developments, Sberbank, Russia’s largest bank, announced a pilot program for crypto-powered settlements. The initiative complements the ongoing digital ruble pilot and discussions about issuing state-backed stablecoins. These efforts signal Russia’s broader strategy to integrate digital currencies into its financial system. 

Russia’s crypto taxation journey began in 2020 when the government first introduced the bill. Approved in its initial reading in 2021, the bill faced several delays amid debates on balancing innovation with regulation. Now, with these amendments, Russia positions itself as a major player in the global crypto playing field. 

Experts believe these measures aim to attract institutional investors and foster a stable crypto environment, even as the country grapples with sanctions and economic isolation. By taxing crypto-related income and enforcing energy restrictions, Russia appears determined to strike a balance between growth and governance. 

Nevertheless, while the new regulations provide much-needed clarity, challenges remain. The two-stage tax system and energy restrictions could deter small-scale miners, who may struggle to remain profitable under the new framework. However, larger institutional mining operations may find opportunities in this regulated environment. 

As Russia tightens its grip on the cryptocurrency sector, it remains to be seen whether these measures foster innovation and stability or stifle growth.