In a significant move, Russia has banned cryptocurrency mining across ten major regions, a decision that will remain in effect until 2031. As reported by local news outlets, the ban concerns the substantial energy consumption associated with crypto mining.
Starting January 1, 2025, a new ban will take effect in Dagestan, North Ossetia, and Chechnya, remaining in place for the following six years.
The prohibition is set to conclude in March 2031, significantly impacting mining pools and independent miners in the process.
In November, Russia implemented new legislation concerning cryptocurrency, mandating that miners register with the finance ministry.
Earlier this year, areas such as Dagestan experienced a series of electricity blackouts, partly attributed to the high energy consumption associated with crypto-mining activities. Recent estimates indicate that bitcoin mining accounted for approximately 17% of the nation’s energy consumption this year. As Russia implements restrictions on the industry, some miners are responding by relocating their operations underground.
Abdulmuslim Abdulmuslimov, the prime minister of Dagestan, revealed to Reuters that operators of unauthorized cryptocurrency mining setups are devising innovative strategies to evade legal restrictions, including installing mining farms underground.
Historically, Russia has banned cryptocurrency for payment transactions, yet it has permitted its use for cross-border payments. With the ongoing escalation of the war in Ukraine, reports have surfaced regarding Russia’s purported utilization of cryptocurrency to circumvent sanctions. This development has led to heightened scrutiny from the U.S., which is intensifying its focus on crypto transactions linked to Russia.
In July, Russia announced a new law permitting cryptocurrency use for international trade. The legislation empowers the nation’s central bank to create an “experimental” infrastructure to facilitate crypto transactions. “We are making a significant decision in the financial sector,” stated Anatoly Aksakov, the head of the Russian parliament’s finance committee, regarding the initiative.