Russia’s Vladimir Putin has made it official—Bitcoin is here to stay, and no one can ban it. Speaking at the Investment Forum in Moscow on December 4, Putin made it clear that he believes crypto is the future. The president seems to have gone pro-crypto now, though to be fair, he was never particularly against it.
Just days before, Putin signed a groundbreaking law that legally classifies cryptocurrencies as “legal property.”
Crypto taxes and strategic moves
The law creates a solid legal framework for taxing crypto transactions and mining activities. Russia, already a crypto mining giant, is banking on bringing in up to 200 billion rubles ($2 billion) a year from mining alone.
The Russian government, with Putin’s blessing, is pulling out all the stops to capitalize on its untapped crypto potential. The new law is nothing if not strategic. By exempting cryptocurrency mining and sales from the value-added tax (VAT), Russia is giving miners some breathing room.
However, operators must still report their activities to local authorities. Skipping this requirement comes with a 40,000-ruble ($380) fine.
For those trading crypto, income taxes apply. Earn up to 2.4 million rubles ($22,300), and you’ll pay 13%. Anything above that? A steep 15% rate kicks in. Corporate entities won’t escape either—they’ll face the standard corporate tax rate of 25% starting next year.
Putin’s relationship with crypto
Back in 2017, Putin wasn’t exactly a fan of cryptocurrencies, calling them risky for financial stability. But then, things changed. After meeting Vitalik Buterin, the guy behind Ethereum, the president saw the potential of blockchain tech.
Russia quickly climbed to the top of the crypto mining ranks, second only to the U.S., after China bailed on mining in 2021. That growth came with a cost—huge energy demands. Putin flagged the risk of power shortages and slapped on tighter rules to manage the mining boom.
Fast forward to 2020, and crypto got the green light in Russia—but with strings attached. By 2023, Putin was saying Russia shouldn’t miss the chance to use crypto for global trade.
On the subject of Bitcoin national reserves, Putin said, “A legitimate question: why accumulate reserves if they can be lost so easily?” He believes it just makes more sense to use crypto instead.
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