Russia has approved the ban on crypto mining in 6 regions until 2031. The reason is the shortage of power in these areas affecting the economy of the country.
The Russian Commission on Power Industry has announced the ban in 6 regions of Caucasus. This also includes the disputed territories that were taken over by the forces in Ukraine.
The announcement also says that there is a plan to ban three areas in southeastern Siberia near Lake Baikal for six years during extreme winters.
According to the Kommersant newspaper, The limitations will be in action from December 1st onwards.
Crypto mining in these areas consumes 1.5% of the total electricity used in Russia per year
Major crypto miners are situated in the areas under this ban. They had the benefits of cheaper electricity and an easily accessible power grid. In total, these mining structures have consumed electricity up to 16 billion kilowatt hours per year. As per the Russian Energy Ministry, this makes up 1.5% of the country’s total power consumption.
Crypto mining in Russia saw an increase after the price of Bitcoin increased rapidly and China deemed crypto-related activities illegal in 2021.
Furthermore, the international ban on traditional payments related to Russia following the Ukraine invasion in February 2022 motivated the Kremlin to allow crypto mining. This started the testing of digital tokens as a way for cross-border transactions.
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