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Here's how the legalization of crypto mining in Russia may affect the price of Bitcoin

On November 17, a measure was submitted to the Russian State Duma that sought to legalize mining and the selling of bitcoin.

Photo by Social Income / Unsplash

A new measure in Russia aims to allow cryptocurrency sales and mining under a "experimental legal framework." On November 17, a measure was submitted to the Russian State Duma that sought to legalize mining and the selling of bitcoin.

According to Anatoly Aksakov, the Duma Financial Markets Committee chairman, the law is set to take effect on February 1. (1) In the lower chamber of the Russian parliament, a new measure involving cryptocurrency mining has been submitted. On November 17, the bill suggests allowing cryptocurrency mining and selling extracted cryptocurrency. Russian miners' sales of Bitcoin and other cryptocurrencies might put more selling pressure on the commodity.

On November 17, a new crypto-mining law (2) was submitted to the lower chamber of the Russian parliament. The proposed legislation would make both mining cryptocurrencies and selling the extracted digital assets lawful. Currently, Russia does not allow the usage of cryptocurrencies for payment settlement. However, the new bill's draft aims to make cryptocurrency mining and sales lawful under an "experimental legal framework." According to the proposed bill: The person who mined the digital currency in question may dispose of it, provided that no transactions involving it are conducted using Russian information infrastructure, with the exception of those transactions that are carried out in compliance with the in place experimental legal system.

The Russian law regulating crypto mining may be approved as early as 2023.
The proposed measure is anticipated to pass all three parliamentary readings in December 2022, according to Anatoly Aksakov, the chairman of the Duma Financial Markets Committee, who spoke to the local press. Some sources (3) claim that the measure might become law as early as January 1, while others assert that it could take effect as early as February 1. The legislation on digital innovation approved in 2020 allowed for the creation of this draft bill. The measure also outlaws the commercialization of digital assets in Russia and defines cryptocurrency mining and mining pools.

The price of bitcoin can drop due to selling pressure

There is a chance that miners would sell their digital assets on exchanges if the new mining bill in Russia is passed into law. This would indicate that miners send Bitcoin to exchanges where they may sell it for fiat money or trade it for other cryptocurrencies. An increase in a cryptocurrency's supply on exchanges causes more selling pressure, which lowers its price. The increasing balance on exchanges and the Russian miners' sales of BTC might have a negative effect on the price of bitcoin.