A Russian Deputy Minister of Energy announced that the government will ban crypto mining in some regions. The reason for this temporary ban is the problems with their electricity supply.
Notably, this announcement came on the same day the Treasury announced new sanctions.
However, Russia continues to support cryptocurrencies even with this ban. The country sees crypto as a way to make cross-border payments.
Russia Limits Crypto Mining in Power-Strained Areas
The Russian state news agency TASS reported the ban on crypto mining. The Deputy Minister of Energy, Yevgeny Grabchak, explained that the ban is temporary during the RBC Tech Forum.
According to the minister, the state will soon ban mining in certain regions already facing electricity shortages.
These areas include the Far East, the southwest of Siberia, and the South. In these regions, the government has not been able to provide large amounts of electricity to anyone for a long time.
Further, Grabchak revealed that this situation will last until 2030. Since 2023, Russia has become a top country for crypto mining, mainly due to support from the government for the industry.
According to Izvestia, a major newspaper in Russia, Russian firms mined more than $54,000 BTC that year.
However, concerns about the power supply will lead to temporary halts in some mining operations. The report did not provide a complete list of all the areas that will be affected.
These new restrictions are part of broader crypto rules the Russian government approved this year. Notably, one important law giving the government more control over crypto mining was supposed to start on November 1.
With this law, the state can now ban mining in certain regions. It also allows the government to oversee mining pools, thereby managing these groups’ operations.
Russia’s Support for Crypto Remains Strong Amid Mining Ban
This temporary ban does not mean that Russia is against the crypto industry. Just last week, the Russian delegation played an essential role at the BRICS Summit.
At the summit, Russia supported using crypto among BRICS countries. One central idea was to create BRICS Pay, a system allowing cross-border crypto payments.
The delegates even suggested using Bitcoin for these payments. This shows that Russia still sees value in crypto, despite the current restrictions on mining.
A major concern for Russia and other BRICS countries is how crypto can help avoid U.S. sanctions. For instance, on October 31, 2024, the U.S. Treasury announced new sanctions. These sanctions target people and companies that do business with Russia.
In total, 275 entities in 17 countries are affected. This includes BRICS members like India and China. This situation shows why the Russian government is interested in finding new ways to make cross-border payments.
The temporary ban on mining might affect Russia’s share of the Bitcoin hash rate. However, it does not change Russia’s overall support for the crypto industry.
