The Russian Energy Ministry proposes a crypto mining ban in select regions from December 2024 to manage energy shortages and high demand.
The Russian Energy Ministry has proposed a ban on cryptocurrency mining in several regions, starting in December 2024. The proposal addresses concerns about energy shortages and high electricity demand in specific areas. According to a source in the office of Deputy Prime Minister Alexander Novak, the issue will be discussed at a governmental commission meeting on November 18.
The ministry considers the ban useful, especially for regions with subsidized electricity tariffs and regions of energy scarcity. These areas are considered vulnerable, especially when electrical power shortages are expected soon. According to the Energy Ministry, banning mining during such times could help reduce the pressure on the energy networks.
The governmental commission will consider the proposal concerning the recommendations of the Energy Ministry and regional governments. The government can call for mining bans in some areas, and decisions will be made. This is a continuation of attempts to find a compromise between the use of cryptocurrencies, which require the creation of new blocks through the use of computing resources, and the need for a stable and high-quality energy supply.
Russia Considers Long-Term Crypto Mining Restrictions to Protect Power Grid
These include the Irkutsk region, the Buryat Republic, and the Trans-Baikal region. The ban would be implemented from December 1, 2024, to March 15, 2025, during which winter power demand is high. From this initial period, the restriction could continue each year from November 15 to March 15 until 2031.
The ban may be spread to other regions, including Karachay-Circassian, Kabardino-Balkaria, and North Ossetia-Alania. Other areas that could experience mining restrictions include Ingushetia, Chechnya, Dagestan. It also includes several parts of Ukraine, like Kherson, Zaporozhye, and the so-called Donetsk and Luhansk People’s Republics.
The government has targeted these areas due to the increasing energy requirements of cryptocurrency mining. While mining has been beneficial in terms of generating income, it is very energy-costly and puts further demand on the regional electricity networks. This proposal can be considered quite conservative regarding managing the country’s energy resources. However, it meets the requirements of the digital economy and essential services.
If the ban is approved, it will significantly change how Russia regulates cryptocurrency mining. The government is seeking to balance economic opportunities and energy sustainability as it navigates the challenges of an increasingly digital world.
