Russia extends regional crypto mining ban to 6 years as energy woes mount

The Russian government has extended a winter ban on local crypto mining operations to six years as energy consumption in the country rises to alarming levels. About a month ago, the government ordered cryptomining entities to stop their operations for the winter season. Now, the ban has been extended.

According to a report by local media Tass, the Russian Cabinet of Ministers has banned crypto mining, including local participation in mining pools, in select regions and territories from January 1, 2025 to March 15, 2031.

Russia bans cryptocurrency mining in select regions

Although the list of affected regions is not final, it includes areas such as Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, Donetsk Republic, Lugansk People’s Republic, Zaporizhia and Kherson. Ministers noted that the list remains subject to change depending on the government’s decision on energy development.

In addition to the ten areas, the government temporarily bans crypto mining in some territories of the Irkutsk, Buryatia and Zabaikalsky Krai regions. These areas will refrain from dedicating themselves to mining activities during the periods of maximum energy consumption from January 1 to March 15 of 2025 and from November 15 to March 15 of the following years.

The Russian government’s decision stems from the need to maintain the country’s energy consumption balance. Last year, Russia became the world’s second-largest crypto miner after the United States, and since then the country has used at least 16 billion kilowatt-hours of electricity annually for such activities.

High power consumption problem

Cryptomining currently accounts for 1.5% of Russia’s global energy consumption, which has been a challenge for regions with harsh climates. In addition, high energy consumption has created an imbalance in electricity payments in various regions of the country. The government is working to reduce or eliminate this imbalance.

Sergey Kolobanov, Deputy Director of the Center for the Economics of Fuel and Energy Sectors of the Center for Strategic Research, said:

The so-called interregional cross-subsidy, when the low cost of electricity in regulated contract regions is de facto compensated by producers and consumers in other regions. The terms of the cryptocurrency mining restrictions are synchronized with the end of the transition period for the removal of this benefit.

Interestingly, Russia recently legalized crypto mining and introduced a mandatory registration service that allows the Federal Tax Service to obtain information about miners’ assets and crypto wallets.

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