Thomas Daniels
A draft resolution proposed by the Russian government would severely restrict cryptocurrency mining in a few areas. The legislation, which targets energy-intensive sectors including mining and mining pool participation, will be in force from January 1, 2025, until March 15, 2031.
The prohibition will notably impact Dagestan, Ingushetia, Chechnya, Kabardino-Balkaria, and North Ossetia, according to TASS reports. The Luhansk and Donetsk People’s Republics, as well as portions of Zaporizhia and Kherson, will also be subject to extra restrictions. There will also be temporary restrictions in some sections of the Irkutsk Region, Buryatia, and Zabaikalsky Krai during peak load hours. These limitations, which are a reflection of regulations intended to control energy usage across industries, will be in effect from November 15 to March 15 of each year between 2025 and 2031.
These actions are attributed by experts to persistent energy scarcity and the inexpensive electricity in subsidized areas. One important element, according to Sergey Kolobanov of the Center for Strategic Research, is interregional cross-subsidization. With electricity prices as low as $0.01 per kWh in places like Irkutsk, subsidized rates have drawn a lot of cryptocurrency mining activity, putting a pressure on power infrastructure during winter peak hours.
Additionally, the Russian Cabinet of Ministers has hinted that the list of restricted areas might be modified in response to suggestions made by an electricity commission. These policies have been defended by authorities as an essential step in addressing energy equity and resolving pricing inequalities nationwide.
At the same time, the government is getting ready to privatize the power sector, which could someday make these prohibitions unnecessary. Reduced industrial demand, export restrictions, and rising residential electricity consumption—which increased by 5.8% in industrial zones by mid-2023—have all contributed to Russia’s energy problems.
A 15% tax on Bitcoin mining income was implemented in November 2023 as part of earlier efforts to control the cryptocurrency industry. These new regulations seek to establish a more sustainable electricity structure while balancing energy use and guaranteeing fair access.
