Put on pause: Russia introduces a ban on mining in a number of regions
On Tuesday, December 24, it became known that in more than 10 regions of the Russian Federation from the new year will begin to operate a ban on mining activities. In three of them it will be introduced only in some territories. Restrictions will be in effect until March 15, 2031. More about the ban, as well as its reasons and necessity - in the material "Izvestia".
The ban on mining in Russia: where introduced, the list of regions
As reported by TASS on December 24, the Russian government approved a list of 13 regions and territories of the country, where from January 1, 2025 a ban on mining activities. The restrictions will affect the mining of digital currency, as well as mining pools. They will be in effect until March 15, 2031.
Regions where the ban is imposed on the entire territory are:
- Dagestan;
- Ingushetia;
- Kabardino-Balkaria;
- Karachay-Cherkessia;
- North Ossetia;
- Chechnya;
- Donetsk People's Republic;
- Lugansk People's Republic;
- Zaporizhzhya Oblast;
- Kherson Oblast.
In the Irkutsk Region, Buryatia and Trans-Baikal Territory, the ban will be introduced only in some territories, and it will be in effect not permanently, but during the peaks of energy consumption. In 2025, it will fall between January 1 and March 15. At the same time, in subsequent years, the restrictions will reportedly affect the period from November 15 to March 15.
The list of regions is not final and may be adjusted.
It is specified that the purpose of such restrictions is to maintain the balance of energy consumption, taking into account the demands of industry.
Why are regions introducing a ban on mining?
On November 1, 2024, the law on the legalization of mining came into force in Russia. It is assumed that changes in the legislation will allow, on the one hand, to legalize mining and receive additional income to the budget, and on the other hand, to limit such activities in case of a shortage of electricity capacity in certain regions.
Russian President Vladimir Putin stated in July of this year that uncontrolled consumption of electricity by miners could lead to a power shortage in some regions of the Russian Federation. At the same time, the president noted that Russia is already one of the world leaders in mining.
Miners consume a huge amount of electricity, and due to the lack of regulation at the legislative level, as well as low energy prices, there is a shortage of capacity in some regions of the Russian Federation.
An important reason for the introduction of a ban on mining was also the benefits of paying for electricity in some regions. As reported in the Ministry of Energy on December 17, 2024, due to mining activities in Siberia, and especially in Irkutsk, there is a significant increase in energy consumption. At the same time, the payment for new generation needed to cover the increased demand falls on the shoulders of all consumers.
What is mining and cryptocurrency mining in Russia?
Mining is the extraction of cryptocurrency by solving complex mathematical problems for cryptocurrency transactions. Powerful computers are used for this purpose. Mining is the attachment of blocks with information about transactions that result in a continuous and consistent chain called a blockchain.
The boom of cryptocurrency mining, including bitcoins, in Russia began in 2020 and led to an increase in electricity consumption. At the same time, Irkutsk has become the unofficial mining capital of the Russian Federation. This happened, in particular, because of the lowest electricity tariffs. Subsequently, due to the large number of miners in the region began to observe emergency power outages.
Earlier it was reported that mining farms in the Russian Federation for the year consume from 2 to 2.5 GW of electricity. This was said by Dmitry Stupin, Vice President of the Russian Association of Cryptoindustry and Blockchain on power generation at the VII Perm Economic Congress.
On November 1, a law came into force in the Russian Federation, allowing to legally engage in the mining of cryptocurrency. Now legal entities and individual entrepreneurs can engage in mining. For this purpose, it is necessary to register in a special register of the Federal Tax Service. However, the directive does not apply to individuals who can engage in mining within the energy consumption limits of the region where they live.
As Igor Runets, owner and CEO of BitRiver, Russia's largest data center operator, noted at the plenary session of the Eastern Economic Forum (EEF), Russia today ranks second in the world in terms of mining capacity, second only to the United States.
According to the expert, investors from Asia and the Middle East are interested in cooperating with Russia in this industry.
"The rapid development of the industry will be fueled by increasing investments from foreign partners from friendly countries. They were already testing the possibility of investing in Russia even before the law was passed. Now they will see that the foundation has been created, you can go, you can actively develop," Runets noted.
Speaking about the development of industrial mining in the Russian regions, BitRiver CEO noted that it contributes not only to tax revenues to the budget, but also to the development of human potential: large industrial miners invest in regional infrastructure, with their support, specialized training programs are launched.
