Expected to Take Effect in 2025, Significantly Tightening Mining Activities

According to foreign media (TASS), the Russian government recently announced that starting from January 1, 2025, it will ban cryptocurrency mining in ten regions of the country, effective until March 15, 2031. The regions affected by the ban include Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, as well as the four regions of Donetsk, Luhansk, Zaporizhia, and Kherson recently annexed by Russia. Officials stated that this move aims to alleviate pressure on energy supply and prevent winter electricity peaks from causing insufficient power for industrial production or civilian use.

This ban not only prohibits individuals and businesses from engaging in mining but also prohibits participation in any mining pool activities. While mining remains legal in other parts of the country, this is the broadest and strictest blockade Russia has imposed on the blockchain industry, aimed at preventing power shortages caused by massive energy consumption during cryptocurrency mining.

3 Regions Subject to Seasonal Control to Balance Industrial Energy Use

In addition to the aforementioned 10 strictly regulated regions, Russia has also implemented 'seasonal restrictions' on three Siberian regions: Irkutsk, Buryatia, and the Zabaykalsky Krai. In other words, these three regions are not under a comprehensive ban, but during high electricity demand peaks in winter (from January to March 2025, and every year from November to March), cryptocurrency mining activities will be restricted to free up electricity for other industrial or civilian use.

Officials emphasize that the aforementioned list may be dynamically adjusted based on government committee recommendations, but the core goal remains to ensure the balance of Russia's electricity supply and the stability of regional industries.

Regulatory Background: Previously Legally Allowed Mining, Now a Shift

In fact, Russia passed a bill in August this year to legalize cryptocurrency mining and required miners to register with the tax bureau and report mining income. However, the restrictions imposed on many regions are mainly due to concerns about power shortages in winter, fearing that mining would exacerbate the burden on the power grid. The Russian finance department also pointed out that in recent years, as the global cryptocurrency market has become increasingly popular, many regions have experienced 'low electricity prices' attracting a large influx of miners, causing local power supply systems to become overloaded.

A series of industrial expansion plans promoted by the government has intensified the competition for energy, leading to stricter regulations for miners. Vladimir Klimanov, director of IPEI in Russia, pointed out: 'Due to the relatively cheap electricity in the North Caucasus or Far East, the residents of the central regions actually bear part of the costs; therefore, these restrictions could create a more equitable operating environment overall.'

Uncertain Mining Prospects Raise Concerns About Russia's Strategy

In light of this new regulation, many miners located in prohibited areas or subject to seasonal restrictions may be forced to relocate to other regions in Russia with more abundant energy resources or withdraw from the country altogether. Although Russia once legally recognized the legitimacy of mining, the current extreme measures indicate the government's compromise amid the energy crisis. For the cryptocurrency community, this could impact Russia's domestic mining industry in the short term; on the other hand, some operators may expand their operations in unrestricted areas.

Overall, this ban and seasonal restrictions mean that the Russian government is accelerating its attempts to balance 'protecting grid stability' with 'expanding cryptocurrency mining tax revenue'; the mining industry still has potential in the country, but facing urgent winter energy demands, the government has chosen to use administrative regulation, which will continue to affect the blockchain ecosystem development in certain areas of the country until 2031. The subsequent implementation of this policy and whether it will lead to smuggling of mining equipment, illegal mining, and other conflicts will continue to attract significant attention from the market and the international cryptocurrency community.

Further Reading
Competing for Business with Trump? Putin: No One Can Stop Bitcoin, How is Russia Positioning Itself in Cryptocurrency?
A New Landscape in Cryptocurrency Competition! Putin Signs Cryptocurrency Tax Law, Russia Recognizes Bitcoin as an Asset
No Wonder Russia Loves Cryptocurrency! Mining Generates Over $500 Million in Tax Revenue, Successfully Avoiding Sanctions?

[Disclaimer] The market has risks, and investments should be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions herein are suitable for their specific circumstances. Investing based on this is at one's own risk.

《Russia's Major Move! Plans to Ban Cryptocurrency Mining in 10 Regions, Why Did It Suddenly Shift from Allowing Legislation?》This article was first published in 'Crypto City'