Russia Enacts 6-Year Ban on Cryptocurrency Mining in 10 Regions
Russia is implementing a 6-year ban in 10 regions on cryptocurrency mining starting January 2025, lasting until March 2031. This action aims to balance energy consumption and ensure grid stability amid increased demand. Seasonal restrictions will also apply in other areas, reflecting the government's cautious regulatory approach.
The regions facing an outright ban include Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, Donetsk, Lugansk, Zaporizhzhia, and Kherson. In regions such as Irkutsk, Buryatia, and the Trans-Baikal Territory, crypto mining will be paused during peak energy seasons: from January 1 to March 15, 2025, and annually from November 15 to March 15 thereafter.
TASS reports that these restrictions may change based on decisions by the government’s legal committee overseeing energy policies. The goal is to balance electricity usage across regions to prevent shortages while maintaining economic stability.
Sergei Kolobanov, Deputy Director of the Center for Economics of the Fuel and Energy Complex at CSR, stated that electricity subsidies influence this decision. Regions with low-cost energy often lead to financial burdens for producers and consumers in other areas. Kolobanov indicated that if the energy market liberalizes and capacity increases, some restrictions might be lifted.
Russia's share of global Bitcoin mining hashrate has decreased significantly, falling from 11% in 2021 to 4.7% by 2024. Data from Cambridge University shows an average monthly hashrate decline from 13.6 Eh/s to 8.7 Eh/s. The United States currently dominates with a 37.8% share of the global Bitcoin mining hashrate.
Despite legalizing cryptocurrency mining in August 2023, Russia faces challenges in sector growth due to energy concerns and regional restrictions. However, the country is becoming more open to cryptocurrency in other areas, allowing cross-border crypto payments and planning to launch state-backed cryptocurrency exchanges.
Additionally, Russian lawmakers have proposed holding Bitcoin reserves to enhance financial stability amid international sanctions and economic challenges. These developments suggest an evolving stance toward integrating cryptocurrencies into Russia's financial system.