Russia is increasingly applying more detailed regulations in the field of Cryptocurrency. In August, President Vladimir Putin legalized Cryptocurrency mining. Since then, the country has introduced new regulations to align mining activities with national energy needs.
Recent additional rules, including outright bans and seasonal restrictions, are expected to come into effect early next year.
Russian Government Approves List of Areas Banning Cryptocurrency Mining Activities
According to TASS, Russia’s leading state news agency, reportRussia plans to ban Cryptocurrency mining within six years from January 1, 2025 to March 15, 2031 in 10 regions. These regions include Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, Donetsk, Lugansk, Zaporizhzhia and Kherson.
In some places such as Irkutsk, Buryatia and the Trans-Baikal Region, Russia will restrict mining activities instead of enforcing a complete ban. These areas will suspend mining operations from January 1 to March 15, 2025, and from November 15 to March 15 in the following years.
TASS emphasized that the government does not consider the list of prohibited and restricted areas to be fixed and can be adjusted according to decisions from the legal committee managing the development of the energy sector. The government aims to maintain balanced energy consumption through these new regulations.
“This is so-called interregional symmetry, where low electricity costs in regions with regulated contracts are effectively offset by producers and consumers in other regions. After market liberalization in this sector, these restrictions can be lifted, provided there is enough capacity,” said Sergei Kolobanov, Deputy Director of the Center for Fuel and Energy Complex Economics at CSR, said TASS.
According to data from the University of Cambridge, Russian Bitcoin mining accounts for 4.7% of the global hashrate, down from 11% in August 2021. Meanwhile, US Miners account for the largest share at 37.8%. global hashrate.
Cambridge data also shows that the average monthly hashrate of Russian Miners has decreased from 13.6 Eh/s to 8.7 Eh/s. Although Russia has legalized mining, this development has not stimulated significant growth in mining activities in the country.
However, in 2024, the Russian government showed a more open stance towards Cryptocurrencies, including allowing cross-border Cryptocurrency payments and preparing to launch state-owned Cryptocurrency exchanges support. Additionally, Russian lawmakers have proposed holding Bitcoin reserves to enhance financial stability.