Russia to ban crypto mining in some regions starting January 2025 due to energy strain.
Seasonal mining bans will be enforced from Nov 15 to Mar 15 in specific regions until 2031.
New federal regulations require miners to register with the Federal Tax Service starting Nov 2024.
Russia has announced restrictions on cryptocurrency mining operations that will take effect in January 2025. The decision, a response to energy challenges and economic imbalances, introduces new seasonal and regional mining bans.
This marks a pivotal shift in Russia's stance on cryptocurrency mining, as the country moves to regulate the industry while addressing rising energy demands and regional disparities in electricity consumption.
The Russian government’s resolution on crypto mining bans divides the country’s regions into two categories: complete mining bans and seasonal restrictions. Starting January 1, 2025, certain areas, including all six North Caucasus republics, Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, and Chechnya, will face total prohibitions on mining activities.
Along with the Donetsk and Lugansk People’s Republics, Zaporizhia, and Kherson regions, these areas will no longer allow cryptocurrency mining operations, including those involving mining pools.
In contrast, other regions, including the Irkutsk Region, Buryatia, and Zabaikalsky Krai, will face seasonal mining bans. These restrictions will be enforced during peak energy demand periods, typically from November 15 to March 15. For 2025, the initial seasonal ban will start on January 1 and end on March 15.
These seasonal bans will continue annually until March 2031, aligning with Russia’s winter months when energy demand is highest.
Energy Policy and Economic Impacts
Russia’s energy policies and regional economic strategies motivate the new cryptocurrency mining restrictions. The government has been addressing “interregional cross-subsidization,” a system in which electricity costs in certain regions are subsidized, often at the expense of residents in other parts of the country.
Cryptocurrency mining operations, known for their high energy consumption, have exacerbated these disparities. By imposing these new bans, Russia aims to reduce the strain on its energy infrastructure and rectify these economic imbalances.
The restrictions will also coincide with Russia’s broader energy market reforms, set to conclude by 2031, which will eliminate regional electricity subsidies.
Federal Regulations on Crypto Mining
Alongside regional mining restrictions, Russia has introduced new federal regulations that require miners to register their operations with the Federal Tax Service (FTS).
These rules, effective November 2024, mandate that miners report their digital assets and wallet addresses. Individual miners will be subject to a monthly electricity consumption cap of 6,000 kilowatt-hours to distinguish between personal and commercial mining.