russia will ban cryptocurrency mining in some regions due to electricity shortages

1 November 2024 2 minutes Author: Newsman

the Russian government will start banning cryptocurrency mining in some regions due to severe power shortages caused by the war with Ukraine. This will be a new restriction for miners after the recent legalization of the virtual currency for legal entities in the country.

in accordance with the announcement of the Russian Energy Department, from November 2024 mining of cryptocurrencies will be limited in regions where miners have already exhausted all available electricity resources. This applies, in particular, to the Far East, southwestern Siberia and the south of Russia. According to Deputy Minister of Energy Evgeny Grabchak, new consumers will not be able to connect to the network until 2030 due to a shortage of capacity. Earlier, as a result of the increased demand for electricity from cryptominers, Putler blamed cryptominers for the shortage of electricity in some regions, including Buryat and Irkutsk regions. In response to this problem, the Department of Energy proposed to increase the price for miners to reduce the load on the power system.

A recent law signed in October requires miners to register and provide their cryptocurrency wallet addresses to relevant services. Meanwhile, the new bill envisages the creation of an “experimental” infrastructure for the use of cryptocurrencies in international payments, which is supported by the Central Bank. The Russian authorities consider cryptocurrencies as a tool to circumvent sanctions that have significantly affected the country’s economy.

Western sanctions, introduced due to Russia’s war with Ukraine, have severely limited the access of Russian companies to the international financial system. In response, Russia has legalized cryptocurrency mining for entrepreneurs and legal entities, and is also conducting experiments with their use in international transactions to circumvent sanctions. However, the increase in electricity consumption has forced the government to limit mining in some regions.

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