The Russian government has approved restrictions on cryptocurrency mining operations across multiple regions, which will come into effect on January 1, 2025.

The decision, reported by Russia’s TASS news agency, includes a complete ban in several regions and seasonal restrictions in others, which extend until March 15, 2031. It represents a major shift in Russia’s approach to cryptocurrency mining, balancing the country’s status as a major mining hub with growing concerns about energy consumption and regional economic disparities.

The policy comes at a critical time, as Russia recently legalized and began regulating cryptocurrency mining at the federal level. The regulation requires miners to register with tax authorities and comply with specific energy usage limits.

Cryptocurrency mining in Russia affects different regions

The mining ban affects two different categories of areas, each with specific restrictions and timelines.

The first category includes a complete ban in several regions: all six North Caucasus republics (Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, and Chechnya), as well as the Donetsk and Lugansk People's Republics and the Zaporizhia and Kherson regions. These regions face a complete ban on all mining activities, including participation in mining complexes.

The second category introduces seasonal restrictions in specific areas of the Irkutsk region, Buryatia and Zabaykalsky district. These areas will face a mining ban during periods of peak energy consumption.

The seasonal ban will be in effect annually from November 15 to March 15 until 2031. This is in line with peak energy demand periods during the harsh Russian winter. The government has maintained flexibility in its approach, with the Cabinet stressing that the list of affected regions can be adjusted based on recommendations from the State Commission for Electricity Development.

Energy Policy in Russia

The Russian government’s restrictions on mining stem from a combination of energy economics and regional support. According to Sergei Kolobanov, deputy director of the Center for Strategic Research, the ban addresses more than just electricity shortages.

At its core, this policy is about what experts call “interregional cross-subsidies.” This is a system in which electricity costs in certain regions are artificially reduced by subsidies paid by consumers and producers in other parts of Russia.

This support creates economic imbalances that cryptocurrency mining exploits. Vladimir Klimanov, director of the Center for Regional Policy at the Dent Academy, explains that Dent and companies in central Russia traditionally bear part of the costs arising from lower electricity tariffs in regions such as the North Caucasus and the Far East.

The deadline for these restrictions in 2031 is in line with the broader timetable for energy market reform in Russia. As Kolobanov points out, this period coincides with the planned abolition of regional electricity benefits.

Once the market is fully liberalized, these mining restrictions could potentially be lifted, provided that regions have developed the necessary power generation capacity.

Russia’s approach to cryptocurrency mining has been regulated since November 2024, when mining became officially legal under certain conditions. A cornerstone of this framework requires miners to report their digital assets and wallet addresses to the Federal Tax Service (FTS).

The FTS has implemented a mandatory registration system for mining operations, with different requirements for different categories of miners. Business entities, including individual entrepreneurs and legal entities, must register through a dedicated FTS service launched on November 1.

For individual miners, the government has set a monthly electricity consumption cap of 6,000 kilowatt-hours, creating a clear distinction between personal and commercial mining operations.

Miners must register their operations and report their earnings. They also need to operate in permitted areas and time periods. The combination of federal registration requirements and regional restrictions may indicate that Russia wants to balance the economic opportunities of cryptocurrency mining with energy security.