Russia Extends Regional Crypto Mining Ban to 6 Years as Energy Issues Escalate

The Russian authorities has prolonged its winter ban on native crypto mining operations to 6 years as vitality consumption within the nation rises to alarming ranges. A few month in the past, the federal government ordered crypto mining entities to pause their operations for the winter season. Nonetheless, the ban has now been prolonged.

In accordance with a report from native media Tass, the Russian Cupboard of Ministers has banned crypto mining, together with native participation in mining swimming pools, in choose areas and territories from January 1, 2025, to March 15, 2031.

Russia Bans Crypto Mining in Choose Areas

Whereas the record of affected areas shouldn’t be closing, it consists of areas like Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, the Donetsk Republic, the Lugansk Individuals’s Republic, Zaporizhia, and Kherson. The ministers famous that the record stays topic to alter primarily based on the federal government’s determination on vitality growth.

Along with the ten areas, the federal government is briefly prohibiting crypto mining in some territories within the Irkutsk, Buryatia, and Zabaikalsky Krai areas. These areas will chorus from participating in mining actions throughout peak vitality consumption durations from January 1 to March 15 in 2025 and from November 15 to March 15 in subsequent years.

The Russian authorities’s determination stems from the necessity to keep the nation’s vitality consumption steadiness. Final yr, Russia grew to become the world’s second-largest crypto miner after america, and since then, the nation has used at the least 16 billion kilowatt-hours of electrical energy yearly for such actions.

Excessive Vitality Consumption Problem

Presently, crypto mining accounts for 1.5% of Russia’s total vitality consumption, which has been difficult for areas with harsh climates. Moreover, excessive vitality consumption has created an imbalance in electrical energy funds throughout a number of areas of the nation. The federal government is working in the direction of decreasing or eliminating this imbalance.

Sergey Kolobanov, deputy director of the Middle for the Financial system of Gas and Vitality Sectors on the Middle for Strategic Analysis, mentioned:

The so-called interregional cross-subsidization, when the low value of electrical energy within the areas of regulated contracts is de facto compensated by producers and customers in different areas. The phrases of restrictions on cryptocurrency mining are synchronized with the top of the transition interval for the elimination of this profit.

Curiously, Russia lately legalized crypto mining and introduced a compulsory registration service that permits the Federal Tax Service to acquire data on miners’ belongings and crypto wallets.