Russia’s deputy energy minister announced that the government will ban cryptocurrency mining in certain areas. The reason for the temporary ban is their power supply issues.
Notably, this announcement came on the same day that the Treasury Department announced new sanctions.
However, even with this ban, Russia continues to support cryptocurrencies. The country sees cryptocurrencies as a way to make cross-border payments.
Russia restricts cryptocurrency mining in power-stressed areas
Russian state news agency TASS report Cryptocurrency mining is prohibited. Deputy Energy Minister Yevgeny Grabchak explained during the RBC Technology Forum that the ban is temporary.
According to the minister, the country will soon ban mining in certain areas that are already facing power shortages.
These areas include the Far East, southwestern and southern Siberia. In these areas, the government has long been unable to provide large amounts of electricity to anyone.
Furthermore, Grabchak revealed that this situation will continue until 2030. Russia has emerged as the top country for cryptocurrency mining since 2023, largely due to government support for the industry.
According to “Izvestia”A major Russian newspaper stated that Russian companies mined more than $54,000 in Bitcoin that year.
However, concerns about power supplies will cause some mining operations to be temporarily halted. The report does not provide a complete list of all affected areas.
The new restrictions are part of broader cryptocurrency rules approved by the Russian government this year. Notably, a major law giving the government more control over cryptocurrency mining was scheduled to be implemented on November 1.
Under this law, the state can now ban mining in certain areas. It also allows governments to oversee mining pools and thus regulate the operations of these groups.
Russian support for cryptocurrencies remains strong amid mining ban
This temporary ban does not mean that Russia is against the cryptocurrency industry. Just last week, the Russian delegation played an important role in the BRICS leaders’ meeting.
At the summit, Russia supported the use of cryptocurrencies among BRICS countries. A central idea is the creation of BRICS Pay, a system that allows cross-border crypto payments.
Representatives even suggested using Bitcoin for these payments. This shows that despite current restrictions on mining, Russia still sees value in cryptocurrencies.
A major concern for Russia and other BRICS countries is how cryptocurrencies can help avoid U.S. sanctions. For example, on October 31, 2024, the U.S. Treasury Announce new sanctions. The sanctions target individuals and companies doing business with Russia.
A total of 275 entities in 17 countries were affected. This includes BRICS members such as India and China. This situation shows why the Russian government is interested in finding new methods of cross-border payments.
A temporary ban on mining could affect Russia’s share of the Bitcoin hash rate. However, this does not change Russia’s overall support for the crypto industry.
