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 response to 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 is just not remaining, it consists of areas like Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, the Donetsk Republic, the Lugansk Folks’s Republic, Zaporizhia, and Kherson. The ministers famous that the record stays topic to alter based mostly on the federal government’s resolution on vitality growth.

Along with the ten areas, the federal government is quickly prohibiting crypto mining in some territories within the Irkutsk, Buryatia, and Zabaikalsky Krai areas. These areas will chorus from partaking 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 resolution stems from the necessity to preserve the nation’s vitality consumption steadiness. Final 12 months, Russia grew to become the world’s second-largest crypto miner after the US, and since then, the nation has used not less than 16 billion kilowatt-hours of electrical energy yearly for such actions.

Excessive Power Consumption Situation

At present, crypto mining accounts for 1.5% of Russia’s general 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 direction of decreasing or eliminating this imbalance.

Sergey Kolobanov, deputy director of the Heart for the Financial system of Gasoline and Power Sectors on the Heart for Strategic Analysis, stated:

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

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