Russia is set to impose a ban on cryptocurrency mining in regions that are facing energy supply challenges. This move comes as a response to severe power shortages that could potentially disrupt long-term stability until 2030.
Yevgeny Grabchak, the Deputy Energy Minister of Russia, made this announcement during the RBC Tech forum in Moscow. He stated that mining, which is considered the precursor to digitalization, will soon be prohibited at the state level in certain regions.
The regions that are most affected by power shortages include the Far East, southwestern Siberia, and the South. Grabchak explained that these areas are unable to sustain large capacities of energy for an extended period of time until 2030.
This upcoming ban aligns with a new law that was signed by President Vladimir Putin and will come into effect on November 1. The law grants the Russian government the authority to restrict cryptocurrency mining in specific regions or territories, and also allows them to determine the procedure and cases for implementing such restrictions.
Furthermore, the law permits the prohibition of participation in mining pools, which are specialized servers that distribute the workload of mining. Grabchak emphasized the importance of such measures in regions that are considered “shortage zones,” where energy limitations pose concerns for consistent power distribution in the future.
In addition to this, another legislation signed by Putin in August allows for controlled frameworks for cryptocurrency in international transactions. The Bank of Russia will oversee pilot projects in this area, which will require approvals from the Finance Ministry, Federal Security Service, and Rosfinmonitoring. The CEO of Bitriver recently stated that the new mining law could potentially help Russia’s bitcoin mining industry reach the levels seen in the United States within the next two to three years.
