Russia has taken the necessary steps for this end Cryptocurrency mining in specific areas to address potential energy shortages during the winter months.
The government committee supervising energy management in the country announced a seasonal ban on mining activities in many regions of Siberia.
The reason behind the seasonal ban?
According to the report, the seasonal ban in multiple Siberian regions in Russia is because these regions are known for affordable electricity due to their proximity to hydroelectric power plants, which has made them centers of mining operations.
Seasonal pressure on the power grid, coupled with Siberia’s harsh winters, has led authorities to prioritize domestic energy needs over industrial mining activities.
The restriction also extends to areas of Ukraine that Russia declared “annexation.” Many of these areas have suffered severe damage to energy infrastructure since 2022, causing frequent power outages.
With limited resources to rebuild the network, the authorities deemed it necessary to limit energy-intensive activities such as cryptocurrency mining.
These measures come at a time when Russia continues to amend many of its regulatory rules related to cryptocurrencies since Russian President Vladimir Putin cent Law allowing experimental use of cryptocurrencies for international payments and foreign exchange transactions in July.
It is worth noting that the Siberian regions near Lake Baikal are particularly affected by the ban, as they have become popular centers for cryptocurrency mining due to low energy costs. Reports indicate that hydropower plants in these areas traditionally provide electricity at affordable prices, attracting local and international miners.
However, increased consumption has created challenges for local energy supply, especially during the winter, when demand for heating and other basic needs rises.
Before this seasonal ban was finalized, Russian state news agency TASS initially reported that this ban in specific regions of the country would be implemented. Yevgeny Grabchak, Deputy Director of the Ministry of Energy of the Russian Federation, commented on this development:
If we say that mining is the pioneer of digitalization, then mining will be banned at the state level in the near future in some regions. anyone.
Meanwhile, the Russian Energy Ministry estimates that cryptocurrency mining consumes approximately 16 billion kilowatt-hours annually, equivalent to 1.5% of the country’s total electricity consumption.
Ongoing regulation of cryptocurrencies in Russia
It is worth noting that this development comes at a time when the Russian government recently imposed a 15% tax on all cryptocurrency mining and trading activities.
In particular, on November 18, the Russian government announced its “approval” of draft amendments to the draft law dealing with taxation of income and expenses related to mining and trading of digital assets. The Russian Ministry of Finance highlighted the reason behind this step, noting:
As a result of discussions with companies, a decision was made on the advisability of imposing a tax on the financial result from mining as the fairest reflection of the results of this activity. This approach aims to monitor the balance between corporate and state interests.
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