The Russian Federation is moving swiftly to implement a new framework for taxing cryptocurrency transactions. On November 27, the Federation Council, Russia's upper house of parliament, approved a federal bill that classifies digital currencies as property and establishes a 13%-15% personal income tax on cryptocurrency sales. The legislation also exempts Russian crypto miners from value-added tax (VAT) on mined coins.

Having passed three readings in the State Duma, the bill now awaits President Vladimir Putin's signature to become law. Once signed, it will take effect immediately upon official publication.

The law also mandates crypto miners and mining infrastructure operators to report their activities to the government. Non-compliance could result in fines of up to 40,000 rubles (approximately $360). However, mining infrastructure services authorized by the government will not face taxation within Russian territory.

This development coincides with Bitcoin’s meteoric rise against the ruble, which has been weakened by global economic pressures and geopolitical tensions. On the same day the bill was approved, Bitcoin hit an all-time high of approximately 11 million rubles, fueled by a global Bitcoin rally nearing $100,000 and the ruble’s ongoing depreciation. The ruble has seen a 25% drop in value against the US dollar over the past year, with $1 now equivalent to 111 rubles.

Russia’s move signals its intent to regulate the crypto sector more rigorously while benefiting from the surging popularity of digital assets. As Bitcoin continues to break records, the impact of these new taxation measures on the Russian crypto ecosystem remains to be seen.