Main points
- Russian authorities plan Cryptocurrency mining banned in some low-energy areas to avoid power shortages in winter.
- The restrictions will affect the occupied territories of Siberia, the North Caucasus and Ukraine.
- Cryptocurrency mining in Russia consumes nearly 16 billion kilowatt hours per year, Accounting for 1.5% of national electricity consumption.
Russia to ban cryptocurrency mining in certain areas
Russian authorities plan to ban cryptocurrency mining in certain areas, according to revelations Moscow Times reports. The move aims to prevent winter power shortages in specific areas.
The ban will affect some areas of Siberia, including the Irkutsk region, parts of the Republic of Buryatia and the Transbaikal region.
Likewise, the restriction will affect six regions in the North Caucasus, including Dagestan and Chechnya. The ban also extends to occupied Ukrainian regions such as Donetsk, Kherson, Luhansk and Zaposizhiya.
Notably, much of the energy infrastructure has been damaged since the Russian attacks in 2022, with annexed Ukrainian regions suffering power shortages.
Additionally, the report states that Russian Deputy Prime Minister Alexander Novak leads a government committee on cryptocurrency mining restrictions. The committee stressed that these measures would be initiated during the heating season.
According to the schedule, mining activities in Siberia will cease from December 1, 2024 to March 15, 2025. However, annual restrictions will be implemented from winter and last until 2031.
In the North Caucasus and the annexed regions of Ukraine, there will be a complete ban on cryptocurrency mining from December 2024 to March 2031. These areas will not see any seasonal relief.
Russia Expands Cryptocurrency Mining Measures, Unveils New Mining Law
This latest report on cryptocurrency mining restrictions comes after some changes to mining rules in Russia.
On November 1, Russian President Vladimir Putin signed a new cryptocurrency mining law. this new rules The focus is on regulating mining activities and laying out experimental infrastructure for cross-border payments using digital assets.
Some lawmakers in the country applauded the new law as a way to circumvent international sanctions. However, Russia still maintains scrutiny of domestic crypto payments.
Russian authorities also passed new laws to tax cryptocurrency mining activities. The rule classifies digital assets as property for tax purposes. Additionally, the rules provide for taxation of mining income based on market value at the time of receipt.
According to its statement, the government aims to generate 200 billion rubles (equivalent to $2 billion) in annual revenue through mining taxes.
Meanwhile, Russia is now one of the top countries in cryptocurrency mining. It joins other prominent cryptocurrency mining leaders such as the United States, China, Kazakhstan, and Canada.
Cryptocurrency mining has boomed in Russia in recent years due to lower energy costs in some regions. These areas mainly rely on large hydropower stations to generate electricity.
The Russian Ministry of Energy estimates that the country’s annual cryptocurrency mining electricity consumption is close to 16 billion kilowatt hours. This value accounts for approximately 1.5% of Russia’s total electricity consumption.
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