Russia Extends Regional Crypto Mining Ban to 6 Years as Energy Issues Escalate

The Russian government has extended its 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 crypto mining entities to pause their operations for the winter season. However, the ban has now been extended.

According to a report from 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 Crypto Mining in Select Regions

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

In addition to the ten areas, the government is temporarily prohibiting crypto mining in some territories in the Irkutsk, Buryatia, and Zabaikalsky Krai regions. These areas will refrain from engaging in mining activities during peak energy consumption periods from January 1 to March 15 in 2025 and from November 15 to March 15 in subsequent 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 yearly for such activities.

High Energy Consumption Issue

Currently, crypto mining accounts for 1.5% of Russia’s overall energy consumption, which has been challenging for regions with harsh climates. Additionally, high energy consumption has created an imbalance in electricity payments across several regions of the country. The government is working towards reducing or eliminating this imbalance.

Sergey Kolobanov, deputy director of the Center for the Economy of Fuel and Energy Sectors at the Center for Strategic Research, said:

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

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