Russia has banned cryptocurrency mining in ten regions and territories in a bid to combat energy blackouts. According to a report by local news agency Tass on Tuesday explained that the ban will become effective from January 1, 2025.Â
More so, cryptocurrency mining in the listed regions will remain under ban till March 15, 2031. Some affected areas include Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, Zaporizhzhia, and Kherson.
By extension, the ban will also be effective in the Donetsk and Lugansk People’s Republics. Similarly, Russia will impose a temporary ban on mining operations across three regions in Siberia.
This move, according to the Russian government, will help save energy during the winter. Furthermore, lawmakers in the country also introduced a seasonal ban on crucial cryptocurrency mining areas as part of the clampdown.
The report indicated that the restrictions will affect individual and mining pool activities. Areas affected by the seasonal ban include Irkutsk, Buryatia, and Zabaikalsky.
It is worth mentioning that Irkutsk is a major mining region in Russia thanks to its cheap electricity, renewable energy, and cold climate. Numerous cryptocurrency mining companies have moved operations to the area to enhance their profit.
How Russia is Regulating Crypto Mining
Meanwhile, the latest development aligns with the new cryptocurrency mining regulations signed by President Vladimir Putin in August and October 2024. The regulation introduced measures like registration and reporting processes for cryptocurrency miners.
Further, it fueled speculation that Russia has legalized cryptocurrency mining. However, the regulations established new controls and restrictions for the crypto mining sector of the country.
Accordingly, the law restricted foreign entities from mining digital assets in Russia while allowing the Kremlin to impose a ban on mining activities in some regions. The framework explained the rights and responsibilities of all participants in the mining sector of Russia, including the roles of companies and regulatory bodies.
Consequently, the law empowers specific government ministries to determine payable tax rates and impose energy restrictions. Initially, Russian lawmakers intended to restrict mining in Irkutsk and other 12 regions.
On November 19, the country’s deputy prime minister, Alexander Novak, organized a meeting to address the development of the electricity sector. In the meeting, Russian officials concluded that there should be limited mining activities in regions combating power supply issues.
By that, the officials aim to tackle power shortages during peak demand seasons.
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