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Russia, a global leader in cryptocurrency mining alongside the United States, China, Kazakhstan, and Canada, is set to impose targeted bans on crypto mining in specific regions to tackle energy shortages during the winter months. The Moscow Times reports that these restrictions will particularly impact Siberia and certain occupied Ukrainian territories.
Seasonal and Total Restrictions in Place
A government commission, headed by Deputy Prime Minister Alexander Novak, has outlined the measures to stabilize the energy supply during the heating season. In Siberia, crypto mining will be suspended from December 1, 2024, to March 15, 2025, with similar restrictions implemented annually until 2031. In contrast, the North Caucasus and occupied Ukrainian territories will experience a complete mining ban from December 2024 through March 2031, with no seasonal exemptions, according to Kommersant.
New Regulations in Effect
The crackdown coincides with recent crypto-mining laws signed by President Vladimir Putin on November 1. These regulations aim to oversee mining activities and establish infrastructure for experimental cross-border cryptocurrency transactions. While domestic crypto payments remain illegal, lawmakers view these rules as a potential means to sidestep international sanctions.
Balancing Mining Leadership and Energy Needs
As the world’s second-largest cryptocurrency mining hub after the United States, Russia consumes approximately 16 billion kilowatt-hours annually for mining operations—about 1.5% of its total electricity usage, per the Energy Ministry. Alongside the mining bans, the new regulations introduce taxes on mining activities, expected to generate up to 200 billion roubles ($2 billion) annually.
Winter Trouble?
Bitcoin’s mining difficulty has reached a record 102.29 trillion, highlighting the growing computational power securing the network. This key metric, adjusting every two weeks, ensures steady block production amid fluctuating miner activity. Since mid-2024, the difficulty has risen nearly 20%, driven by intense global competition, alongside Bitcoin’s hash rate peaking above 900 EH/s before stabilizing at 730 EH/s.
Russia’s decision to enforce these bans underscores the delicate balance between supporting the growing crypto sector and ensuring energy availability during high-demand periods. As the country heads into the winter season, these restrictions may reshape its crypto-mining landscape while addressing critical energy concerns.