Russia to Ban Crypto Mining in 10 Regions Starting January 2025

The Russian government will impose a six-year crypto mining ban in 10 regions nationwide. The ban will commence on January 1, 2025, and end on March 15, 2031. According to a local source, the government cites a significant strain on local energy grids as the reason for the latest move.

Russia to Ban Mining

Russia’s Cabinet of Ministers argued that mining activities increased power consumption, leading to frequent shortages in regions already facing energy deficits. The ban will also apply to those partaking in mining pools, a collective effort from miners to boost their mining capacity and rewards.

Recall that the Russian government signed a law endorsing crypto mining in August. This legislation allowed any entity to establish crypto mining rigs in any part of the European country. However, the latest move indicates a shift from its existing law for the reason mentioned earlier.

Among the 10 regions affected are Dagestan, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, and Ingushetia. The ban is subject to adjustment based on energy usage patterns.

Experts explain that the ban also addresses unfair electricity pricing, where some regions benefit from “interregional cross-subsidization.” They believe that these restrictions align with upcoming reforms to fix this imbalance. The ban could be lifted once the energy market improves and capacity increases.

Russia’s Stance on Crypto

The Russian government has recently shown support for the crypto sector. Earlier this month, the country’s president, Vladimir Putin, stressed that “nobody can ban Bitcoin.” This echoed his outlook towards the apex crypto asset. The government is already exploring the implementation of a strategic Bitcoin reserve. Since August, the European country has turned to crypto for international settlements to circumvent bans imposed by the Western sanctions.

Last month, the government signed a law allowing the Federal Tax Service (FTS) to tax crypto assets. The tax applies to rewards from mining activities. The government explained that the tax rate would be flexible based on deductions from mining expenses.