Just months after Russian President Vladimir Putin legalized cryptocurrency mining in August 2024, Russia has announced a ban on crypto mining in some areas. Electricity shortages, pushing some regions to the brink, have been the main trigger for the abrupt decision.
During a recent press briefing, Deputy Head of the Russian Federation’s Ministry of Energy Yevgeny Grabchak unveiled the restrictions, adding that in future mining will be prohibited in the near future on a state level in some regions. He said the reduced energy capacity will be in place until at least 2030 in the Far East, southwest Siberia and the South.
Russia’s Regulated Framework
It comes after Putin signed legislation earlier this year aimed at creating a regulated framework for cryptocurrency mining, which was outlawed in the country. The August legislation allowed for only registered legal entities and individuals to mine, and unregistered entities were limited in relation to energy consumption.
The law was also valid for Russian inhabitants to exchange digital currencies, which came upon bills permitting the cryptocurrency to be used within the international change, to beat European sanctions.
High on cryptocurrency mining, for which one essentially needs extensive computing power to validate transaction on blockchain networks, is all the talk. But that has resulted in increasing energy demands in the energy-short areas.
Putin pointed out Russia’s strengths in this sector, saying Moscow had a surplus electricity and a skilled workforce. While this is still the case, the recent energy crisis is forcing on the government reconsidering their position on cryptocurrency mining, so they instead take a qualified approach that harmonizes financial interests with necessity in the field of sustainable energy consumption.
On the topic of digital currencies, as the world grew digital, Russia’s regulatory environment still are being adjusted, thus showing the intricate relations between creativity and resource management.
