Russia to Ban Block Reward Mining During Winter Season to Address Electricity Shortages

Russia will prohibit block reward mining during the winter season each year until 2031 to address electricity shortages in over a dozen regions if new proposals from a government commission are implemented.

Russia is planning to ban block reward cryptocurrency mining during the winter season each year until 2031 in over a dozen regions to address electricity shortages, according to new proposals from a government commission.

The commission, led by Deputy Prime Minister Alexander Novak, was set up to find solutions to electricity shortages as the winter season sets in. In its recent meeting, the commission proposed the ban in regions historically struggling to provide sufficient electricity to heat residents’ homes during the brutal winters.

The ban would affect some of Russia’s key block reward mining regions, including Irkutsk and parts of the expansive northern region of Siberia. It would also extend to Zaporizhzhia, Donetsk, Kherson, and Luhansk, which Russia annexed from Ukraine two years ago.

In Siberia, the ban would commence on December 1 and run to March 15, 2025. In every subsequent year up to 2031, the ban would be from November 15 to March 15. In the other regions, the ban would be from December to the end of March.

The commission tasked the Ministry of Energy and energy companies to work out the details of the proposed ban. They must ensure that the electricity saved by the miners goes to households that need it most. However, sources told the local newspaper Kommersant that no official communication had been made with local governments to enforce the seasonal bans.

The commission also explored other solutions, including building new electricity generation facilities that are projected to produce 1.9 GW of electricity by 2026. While still considering such solutions, commission members opined that more immediate measures are required, and the mining ban is an easy fix in the short term.

The commission clarified that it is not pushing miners out of Russia. Instead, it directed the affected miners to relocate to other regions in the south with excess electricity. However, miners have favored the north and eastern regions, as their very low temperatures drastically lower cooling costs.

Still, the miners believe the ban will punish the legitimate and regulated miners and allow illegal operations to thrive.

“A ban on industrial miners who have all the necessary permits to connect to power grids will provoke the activity of unscrupulous market participants who carry out their activities in violation of all established standards,” commented Sergey Bezdelov, the director of the Industrial Mining Association.

Citing a study from Moscow’s HSE University, Bezdelov added that the cost of relocating miners to another region would be twice as high as building new electricity generation infrastructure.