Russia bans crypto mining in certain regions amid winter energy crisis
Russian authorities said on Tuesday that they would prohibit cryptocurrency mining in a number of areas this winter in order to alleviate power outages.
According to the Energy Ministry, mining uses 16 billion kilowatt-hours a year, or roughly 1.5% of Russia's total electricity consumption, making it the second-largest cryptocurrency mining hub in the world after the United States.
Russia bans cryptocurrency mining in some regions this winter
Six regions in the North Caucasus, including the republics of Chechnya and Dagestan, as well as the Irkutsk region, parts of the republic of Buryatia, and the Zabaikalsky region in Siberia, will be affected by the ban. The occupied Ukrainian territories of Donetsk, Luhansk, Zaporizhzhia, and Kherson will also be included, according to a report from the Moscow Times.
A government commission headed by Deputy Prime Minister Alexander Novak made the decision, which attempts to restrict cryptocurrency mining during the hot season.
Russia bans crypto mining in occupied Ukraine, Siberia, and North Caucasus
Siberia will be off-limits to mining from December 1 to March 15, 2025 and from November 15 to March 15, 2031. According to the Kommersant business newspaper last week, mining in the North Caucasus and occupied Ukraine will be completely prohibited from December 2024 to March 2031, with no seasonal break.
The Russian government also imposed a monthly power consumption cap of 6,000 kWh on unregistered individual miners earlier this month. According to Interfax, miners who surpass this threshold will only be permitted to carry on mining if they register as individual entrepreneurs.
Russia issues a new crypto Law
The limitations come after President Vladimir Putin signed new legislation on November 1st that controls cryptocurrency mining and establishes test infrastructure for international cryptocurrency payments. Although domestic cryptocurrency payments are still prohibited, some lawmakers see the rules as a way to get around the restrictions.
Additionally, this law gives access to digital currency identifier addresses to a number of federal agencies outside of the Federal Financial Monitoring Service (Rosfinmonitoring). Law enforcement and federal executive agencies are included in this expansion, which strengthens their capacity to monitor transactions that might be connected to money laundering or terrorist financing.
Regarding digital currencies, Russia is creating a state-backed digital currency called the digital ruble and expanding crypto regulations. In an effort to get around sanctions and lessen dependency on the US dollar in foreign exchange, the country has legalized cryptocurrency mining and allowed its use in international trade.
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