Key takeaways
- Russian authorities plan to ban crypto mining in some low-energy regions to avoid power shortages during the winter season.
- The restriction will impact Siberia, North Caucasus, and occupied territories in Ukraine.
- Crypto mining in Russia takes almost 16 billion kilowatt-hours yearly, which represents 1.5% of the country’s electricity consumption.
Russia Set To Ban Crypto Mining Activities in Some Regions
Russian authorities disclosed plans to ban cryptocurrency mining in some regions, according to a Moscow Times report. This move aims to prevent power shortages within the specified regions during the winter season.
The ban will affect some regions in Siberia, including the Irkutsk region, parts of the Republic of Buryatia, and the Zabaikalsky region.
Similarly, the restriction will impact six regions in the North Caucasus, including Dagestan and Chechnya. The ban also extends to occupied Ukraine regions, such as Donetsk, Kherson, Luhansk, and Zaposizhzhia.
Notably, the annexed Ukraine regions have suffered power shortages due to the destruction of most energy infrastructure since the Russian attack in 2022.
Further, the report noted that Russian Deputy Prime Minister Alexander Novak led the government commission on the crypto mining restrictions. The commission highlighted that these measures will kick off during the heating season.
According to the schedule, mining activities in Siberia will halt from December 1, 2024, to March 15, 2025. However, the annual restrictions will commence during the winter season and continue through 2031.
In the North Caucasus and annexed Ukraine regions, there will be a total ban on crypto mining from December 2024 through March 2031. These regions won’t witness any seasonal reprieve.
Russia Scales Cryptocurrency Mining Measures, Introduces New Mining Laws
This latest report of crypto mining restrictions comes at the heel of some changes in Russian mining rules.
On November 1, Russian President Vladimir Putin signed new crypto-mining laws. The fresh rules focus on regulating mining activities and laying out experimental infrastructure for cross-border payments using digital assets.
Some lawmakers in the country applaud the new laws as an approach to circumvent international sanctions. However, Russia still maintains its censorship of domestic crypto payments.
Russian authorities also introduced taxation on crypto mining activities through the new laws. The rules classified digital assets as property for tax purposes. Also, the rules specified taxing on mining income based on the market value as of the period of receipt.
According to its statement, the government aims to generate an annual revenue of 200 billion roubles (equivalent to $2 billion) via mining taxation.
Meanwhile, Russia is now among the top countries in crypto mining. It ranks alongside other prominent crypto mining leaders such as the US, China, Kazakhstan, and Canada.
Crypto mining has flourished in Russia in recent years due to low energy costs in some regions. Such regions primarily depend on large hydropower plants to generate electricity.
According to estimates by the Russian Energy Ministry, crypto mining uses almost 16 billion kilowatt hours annually in the country. This value represents about 1.5% of Russia’s total electricity consumption.
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Rida is a dedicated crypto journalist with a passion for the latest developments in the cryptocurrency world. With a keen eye for detail and a commitment to thorough research, she delivers timely and insightful news articles that keep her readers informed about the rapidly evolving digital economy.
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