Authorities in Russia plan to expand a ban on crypto mining introduced in parts of the country to cover more regions experiencing electricity shortages.
The restrictions, initially seasonal and limited to a few power-deficit areas, have already become permanent in over a dozen regions, with more to be affected soon.
Russian government to ban mining in another 2 regions
Russia intends to impose a full ban on cryptocurrency mining in Transbaikal and the Republic of Buryatia, the country’s Deputy Minister of Energy Yevgeny Grabchak indicated during a podcast discussing the future of the recently legalized industry.
Mining in the two Siberian regions was already placed under seasonal restrictions between Jan. 1 and March 15 this year, with local authorities planning to halt mining operations even earlier next winter, starting from Nov. 15.
Grabchak made it clear, however, that the restrictive measures may soon become permanent, just like those in neighboring Irkutsk Oblast, with which Buryatia and Transbaikal share the same energy generation capacities.
Acting in response to pleas from local officials, the federal government imposed last month a total ban on crypto mining in the south of Irkutsk. The latter has been dubbed “the mining capital of Russia” for having attracted a significant number of miners with its low electricity rates.
The regional authorities claim that the spike in consumption due to the activities of bitcoin farms is to blame for frequent power outages and energy shortages in a number of areas.
“We have heard them and we will go along with such a restriction,” Grabchak told the podcast host, Lyudmila Bogatyreva, noting that the ministry will be ready with a new regulatory framework that will allow the government to expand the ban in the near future.
The deputy minister explained:
“This activity will be banned not in the entire territory of the Irkutsk Oblast, but in the southern part, and in Transbaikal and Buryatia, because this is one energy zone and the deficits are common to all three regions.”
Banning crypto mining becomes a trend in Russia
The Russian government ordered a complete ban on crypto mining in almost two dozen districts and towns in southern Irkutsk on April 7. Until now, the restrictions in Buryatia and Transbaikal have been enforced only during peak periods of electricity consumption.
Earlier, the executive power in Moscow approved a list of territories where the minting of digital coins will not be permitted in the next six years, between Jan. 1, 2025 and March 15, 2031.
The full prohibition covers the Russian republics of Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, and Chechnya as well as the Russia-occupied regions of Ukraine – Donetsk, Lugansk, Zaporizhzhia, and Kherson.
Crypto mining may also be banned in the north of the Republic of Karelia, the Penza Region, and parts of the Republic of Khakassia, the Tass news agency reported in late April, quoting a statement by the energy ministry’s press service.
Russia recognized the mining of digital currencies as a legal business activity last year with a law signed by President Vladimir Putin in November. Both companies and individual entrepreneurs are allowed to mine as long as they register with the Federal Tax Service (FNS) and pay due taxes.
Putin has previously highlighted Russia’s advantages as an energy-rich crypto mining destination but more recently instructed the federal government to protect the interests of Russian regions when it comes to ensuring their energy balances, according to media reports.
Besides the new restrictions that affect all miners, private individuals minting crypto are limited to a maximum monthly power consumption of 6,000 kWh. As of April 1, there were 722 miners and mining infrastructure operators registered with the FNS.
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