Central Bank: cryptocurrency mining as a business should be taxed
Mining cryptocurrencies as a business must register with and be subject to taxation, said the first Deputy Chairman of the Central Bank of Russia Olga Skorobogatova.
According to her, mining is not so much the production of cryptocurrencies, is a broader concept. Mining is generally used when applying blockchain technology and is a validation of a transaction that is in the form of blocks represented in this technology.
“Validation is carried out by selection of complex mathematical formulas, do it requires large infrastructure, so we believe that this activity, of course. And as an activity it needs to be registered and subject to taxation,” Skorobogatov said in the interview to TV channel “Russia 24”.
“We mean legal entities and private entrepreneurs that such activity would like to do,” she added.
The draft law on the regulation of cryptocurrencies in Russia, according to the instructions of the President, must be adopted by the state Duma in the first half of next year.
Also, according to Skorobogatova, the initial placement of cryptocurrency (ICO) should be regulated on the principle of initial public offerings (IPO), possibly in a somewhat simplified version.
“The explosive growth of ICO is actually associated with two reasons – first, there is a huge number of startups and tech companies who need to find the means to invest in projects that according to their calculations, need to quickly pay off,” she said.
The second reason, according to her, for this engine all over the world were actively involved in cryptocurrency as a tool to attract investment.
“We believe ICO should be adjusted by analogy with the IPO, it can have a more lightweight version. This is really a topic we need to discuss with colleagues from the Ministry of Finance and other departments”, – said the first Deputy Chairman of the Central Bank.
Because for companies which are startups and there is a 5-10 year history, it is very difficult to apply an absolutely standard mechanism – lending or attracting investment, she explained.
“So I think there may be a reasonable compromise,” concluded Skorobogatova.