Russia’s Ongoing Energy Crisis Forces Restrictions on Crypto Mining

Russia and Crypto Mining: Restrictions Due to Energy Crisis

Crypto Mining in Russia Faces Hurdles: Energy Crisis Forces Restrictions

Russia legalized crypto in August 2024, thereby taking a significant step in regulating cryptocurrency. Taking effect on the 1st of November, Russia permitted only registered entities and entrepreneurs of the country to mine the digital currency.

Recent Development in Russia’s Take on Crypto Market

Recently, crypto has been recognized as a property, including those digital currencies in the experimental legal regime of Russia for foreign trade agreements, and new tax rules have been imposed. With this has risen crypto demand and the traffic has surged by 8% in major crypto exchanges this month.

Russia’s Crypto Facing Hurdles

However, these developments have been facing certain restrictions due to some hurdles, energy crisis in particular. Crypto energy consumption has been in the news since long. This is because the amount of energy required for crypto mining is extremely high and the world’s been already facing an energy crisis. Talking of Russia, the country‘s also been in news for facing an energy crisis before the advent of crypto laws.

Impact of the Energy Crisis and Imposed Restrictions

As a result, the monthly consumption has been limited to 6,000 kWh, while additional restrictions’ been applied in energy-lacking regions of the nation.

Deputy Prime Minister Alexander Novak held a meeting on Nov. 19, discussing required limitations to be put on mining activities in areas with power shortages during peak seasons. Now, there are going to be mining restrictions in certain key regions, the list of which includes Donetsk, Irkutsk, Kherson, Luhansk as well as Zaporizhzhia. The limits are planned to be enforced until 2031. Other regions that may face restrictions can be named as Buryatia and Zabaikalsky.

Consequently, Russia’s mining industry would be facing significant impact with companies like BitRiver getting severely affected as they are dependent on cheap energy in regions like Irkutsk.