In response to potential energy shortages during the winter months, Russia has implemented measures to limit cryptocurrency mining in specific regions. The government commission overseeing the country’s energy management has announced a seasonal ban on mining activities in several Siberian regions known for their affordable electricity due to their proximity to hydropower plants.
The decision to impose seasonal bans on mining activities in these regions is driven by the strain on the energy grid during the harsh Siberian winters, as authorities prioritize domestic energy needs over industrial mining operations. The restriction also extends to areas of Ukraine that Russia has declared “annexed,” where significant damage to energy infrastructure has led to frequent power outages.
The Siberian regions near Lake Baikal, in particular, have become popular hubs for crypto mining due to low energy costs provided by hydropower plants. However, the increased consumption has put pressure on the local energy supply, especially during winter when demand surges for heating and other essential needs.
Yevgeny Grabchak, Deputy Head of the Ministry of Energy of the Russian Federation, commented on the ban, stating that mining will be banned at the state level in some regions in the near future. The Ministry of Energy estimates that cryptocurrency mining consumes roughly 16 billion kilowatt-hours annually, equivalent to 1.5% of the country’s total electricity consumption.
This move comes as the Russian government continues to regulate cryptocurrency activities, including implementing a 15% tax on all crypto mining and trading activities. The approval of draft amendments to the bill addressing the taxation of income and expenses related to mining and trading digital assets aims to strike a balance between the interests of businesses and the state.
Overall, Russia’s decision to restrict crypto mining in key regions reflects the government’s efforts to address energy shortages and regulate the growing cryptocurrency industry in the country. As the winter months approach, authorities are taking proactive steps to ensure the stability of the energy grid and meet domestic energy needs.