Russia’s government has approved a ban on mining in several regions until 2031

What’s new? The Russian government intends to ban cryptocurrency mining in three regions of the country due to the shortage of electricity. Following the results of the meeting of the Government Commission on the Development of the Electric Power Industry, the proposal to introduce the ban in the entire territory of the Irkutsk region, as well as in certain areas of Buryatia and Trans-Baikal Territory during the fall-winter heating period until 2031 was approved.

Press release

What else is known? According to Evgeny Grabchak, Deputy Minister of Energy of the Russian Federation, the Commission supported all the proposals of the Ministry of Energy. Now the Ministry together with energy companies will have to work out mechanisms for controlling compliance with the ban, as well as redistribution of the released capacity previously used by miners.

The above-mentioned regions will probably not be the only ones. The authorities will consider introducing similar bans in ten more regions: Ingushetia, Dagestan, North Ossetia, Chechnya, Kabardino-Balkaria and Karachay-Cherkess Republics, Luhansk, and Donetsk People’s Republics (LNR/DNR), as well as in Zaporizhzhya and Kherson regions.

Evgeny Grabchak reported about the ban on mining at the end of October. Then he noted that the deficit zones are the Far East, as well as the southwestern part of Siberia and the southern regions of Russia.

Jack Dorsey’s Block will increase investment in mining and crypto wallet development

Along with this, the company will reduce non-mining business units

Read more

The ban became possible after the law on regulating the circulation of digital currency came into effect on November 1. The document gives the government the authority to ban mining and participation in mining pools in certain territories, as well as to regulate the activities of infrastructure operators.

Later, the Chairman of the Board of ROCIT, Deputy Chairman of the State Duma Committee on Information Policy, Information Technology and Communications Anton Gorelkin, noted the negative consequences of the law, which could hinder the development of the industry:

“Many miners are not afraid of additional costs and relocations, but they say that the rampant prohibitionist practice forms an attitude to mining as a certain evil source of problems. On the one hand, the industry has received long-awaited regulation, but on the other hand, it is immediately declared a threat to the Russian energy system.”

In turn, Deputy Head of the Presidential Administration of the Russian Federation Maxim Oreshkin said at Sber’s blockchain conference that the development of mining in the next 5-10 years may create a problem of electricity shortage in the country.

Chainalysis: Russia has become the leader in cryptocurrency inflows in Eastern Europe

Overall, this region has become the fourth-largest global crypto market

Read more

According to RBC, last year Russia was in second place in cryptocurrency mining with a 14-17% share in the global hashrate.