A government commission may modify the Russian crypto mining prohibition in response to energy demand assessments, but it is currently focused on energy-subsidized regions.
The Council of Ministers has authorized the Russian crypto mining prohibition, which will be in effect from January 1, 2025, until March 15, 2031. The state-owned news agency Tass reported on December 24 that the action would contribute to the maintenance of an equilibrium in the energy supply.
Dagestan, North Ossetia, and Chechnya comprise the identified regions. The price of electricity is reduced in the aforementioned regions as a result of inter-regional subsidies on electricity, which in turn increases the energy intensity of crypto mining. In the event that a commission determines that modifications in energy consumption necessitate such action, the government will evaluate the possibility of revising the list of prohibited regions. There is also the possibility of momentarily lifting the prohibition during periods of low energy consumption.
In July, Russian crypto mining was legalized, and the law was implemented last month. Nevertheless, the use of cryptocurrencies as a legal payment method for internal transactions remains prohibited, despite the fact that mining is permissible. As a result of Russia’s invasion of Ukraine, cross-border crypto settlements are exempt from international sanctions.
The latest prohibition is a refinement of a previous proposal from November, which sought to prohibit mining in 13 regions, including the critical mining center of Irkutsk. The modifications are implemented to mitigate energy depletion concerns while simultaneously preserving economic stability in non-restricted regions.
Crypto mining necessitates substantial power consumption, which is why Russia is not the sole nation that is curtailing its operations. Kosovo prohibited mining in 2022 to conserve electricity during an energy crisis, while Angola criminalized it in April 2024. In Europe, Iceland and Norway also have extremely strict regulations regarding energy.
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