Crypto Miners Face a Major Blow in Russia’s Energy-Restricted Zones

Russia is moving to ban cryptocurrency mining in energy-restricted regions, citing severe power shortages that could jeopardize long-term stability until 2030.

Russian authorities are preparing to ban cryptocurrency mining in regions facing energy shortages, a move that could significantly impact the country's crypto sector.

According to a report by Tass, Deputy Energy Minister Yevgeny Grabchak stated at the RBC Tech forum in Moscow that digital currency mining will be prohibited at the state level in several Russian regions due to energy supply challenges.

“If we say that mining is the forerunner of digitalization, then mining will soon be banned at the state level in some regions,” Grabchak said.

The deputy minister explained that regions facing power shortages, including the Far East, southwestern Siberia, and the South, cannot sustain “large capacities to anyone in the long term until 2030.”

“We will not be able to provide large capacities to anyone in the Far East, southwestern Siberia, and the South in the long term until 2030. These are shortage zones, and we need to provide guaranteed power supply to the population, industry, and social sphere,” Grabchak added.

The upcoming restrictions follow a new law signed by President Vladimir Putin, which will take effect on Nov. 1. The law, published last week, empowers the Russian government to restrict digital currency mining in specific regions or territories and to “determine the procedure and cases for introducing such restrictions.”

The legislation also allows for the prohibition of participation in mining pools, which are specialized servers designed to distribute the workload of crypto mining among participants. According to Grabchak, such measures are crucial in regions with energy limitations.

“We are talking about the prohibition of participation in mining pools, which is critical for shortage zones,” the deputy minister said.

In August, Putin signed legislation introducing controlled frameworks for cryptocurrency in international transactions, with the Bank of Russia overseeing pilot projects that require approvals from the Finance Ministry, Federal Security Service, and Rosfinmonitoring.

Bitriver’s CEO recently stated that the new mining law could help propel Russia's bitcoin mining industry to reach U.S. levels within two to three years.