Russia will ban crypto mining in 10 regions from January 2025 to address energy shortages and balance electricity use.
Russia has announced that it will ban crypto mining in 10 regions starting on January 1, 2025. The ban will be in place for six years until March 15, 2031. This was done to end electricity shortages in key mining zones. The rules, reported by TASS, will stop mining in areas across Russia. The measures are aimed at helping control energy use in regions where the use of electricity is high.
The ban applies to the Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya and the Donetsk and Lugansk People’s Republics. They also include the Zaporizhia and Kherson regions. Also, temporary mining restrictions will be in force as in parts of the Irkutsk Region, Buryatia and the Zabaikalsky Krai during the periods of high energy load. They will be from January 1 to March 15, 2025 and every year from November 15 to March 15.
Russia May Lift Crypto Mining Ban if Energy Supply Stabilizes
The Russian government says the ban is about balancing energy use in the country, specifically when demand for electricity is high. The ban is because of local electricity shortages, explained Sergey Kolobanov, a deputy director at the Center for the Economy of Fuel and Energy Sectors. He also said that other regions pay for some of the regions to have relatively low electricity costs. As a result, central Russia is basically subsidizing electricity in other parts of the country.
The list of affected regions might change in the future, the Russian government also pointed out. The decision will be based on the recommendations of the government commission on electric power development. It is apparent that the short-term goal is to right the imbalance in electricity payments among different regions.
If market conditions change, these restrictions may be lifted in future. Restrictions could be removed after liberalization of the electricity market is carried forward if sufficient energy capacity would be available to supply consumers’ demand.
This comes after proposals by Russia’s Energy Ministry to limit mining because of energy shortages. However, in September, President Vladimir Putin confirmed that Russia is now a major global player in Bitcoin mining. Russia has vast energy resources in Siberia and in 2023 mined 54,000 BTC, a tax revenue of more than $550 million. However, the government is now taking steps to manage energy consumption, as well as balance energy imbalances on a regional level.
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