The Russian government is preparing to restrict crypto mining in certain regions due to electricity shortages, according to Deputy Energy Minister Evgeny Grabchak.
At a recent technology forum, Grabchak outlined that areas like the Far East, southwestern Siberia, and the South are experiencing major energy deficits, making it difficult to meet high electricity demands.
He noted that power limitations in these regions are projected to persist until at least 2030, necessitating limits on energy-intensive activities like crypto mining.
The new restriction aligns with legislation recently signed by President Vladimir Putin, granting authorities the right to ban or regulate crypto mining in specific territories.
Breaking: #Bitcoin Mining is now legal in Russia starting today.
All rigs that went to Kazakstan will drive over the border and connect back to the cheapest electricity on earth.
— MartyParty (@martypartymusic) August 24, 2024
This law, effective Nov. 1, will provide a framework for enacting regional bans, including restrictions on mining pools, which distribute the computing load of crypto mining across multiple servers.
Regulations Extend to Advertising and Subsidized Electricity
In addition to restricting crypto mining, the Russian government is enforcing new rules on cryptocurrency-related advertising. Following the updated law, Russia’s largest search engine, Yandex, revised its policies to prohibit ads for crypto exchanges, blockchain services, smart contracts, crypto mining, and initial coin offerings.
Yandex’s policy also bans advertisements promoting earnings from cryptocurrency activities or offering services to analyze crypto wallet transactions for money laundering.
Further, Grabchak proposed that miners in regions with subsidized electricity should not benefit from standard market prices, as subsidies in these areas are intended for households and small businesses.
He suggested that “in regions with shortages, mining should be prohibited during periods of shortages,” emphasizing that crypto miners should explore generating their power to avoid straining public resources.
New Approach to Regional Crypto Mining Limits
This latest legislation allows Russia’s Cabinet of Ministers to implement crypto mining bans in regions facing energy deficits. Grabchak advocated for ending the non-discriminatory approach toward electricity pricing for miners in energy-limited areas, recommending alternative measures to protect energy availability for local consumers.
These new restrictions establish a controlled approach to crypto-mining operations in Russia’s energy-sensitive regions.