Originally published on: November 20, 2024
In a strategic move to conserve electricity, the Russian government is contemplating imposing restrictions on cryptocurrency mining in 13 regions. These potential restrictions come in the wake of recent laws passed targeting the crypto industry.
During a government commission meeting led by Deputy Prime Minister Alexander Novak on the development of the electric power industry, officials proposed limiting mining activities in regions grappling with power supply challenges. The objective is to avert shortages during peak energy demand periods.
The proposed restrictions are set to impact vital crypto-mining regions like Irkutsk, Donetsk, Luhansk, Zaporizhzhia, and Kherson, among others. These measures will be enforced until 2031 to mitigate power supply pressure during the autumn-winter heating season.
Furthermore, the government is considering similar limitations until 2031 in various territories, including Dagestan, North Ossetia-Alania, Ingushetia, Chechnya, Kabardino-Balkaria, and Karachay-Cherkessia.
The implementation of such restrictions could significantly impact Russia’s crypto mining industry, particularly prominent local firms such as BitRiver that heavily rely on low-cost electricity in regions like Irkutsk. It’s worth noting that Irkutsk, with its abundant hydroelectric potential, favorable electricity rates, and cold climate, has been a hotspot for crypto miners.
One of the world’s largest data centers by BitRiver was established in Bratsk in 2019, leveraging the city’s proximity to the immense hydroelectric power station with a capacity of 4,500 megawatts.
While President Vladimir Putin signed comprehensive crypto mining laws in August and October 2024, providing a regulatory framework for the industry, uncertainties persist among stakeholders. Critics have raised concerns about certain aspects of the regulations, including restrictions on foreign entities engaging in mining activities within Russia’s borders.
As Russia navigates these regulatory challenges, the future of crypto mining in the country remains uncertain. Stay informed and explore more insightful articles like this by subscribing to the Markets Outlook newsletter for exclusive updates on investment opportunities and trading strategies. Join our community today!
