Key takeaways
- Russia will impose crypto mining bans in energy-deficient regions.
- The government aims to address electricity shortages caused by high electricity consumption.
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Russia is considering banning Bitcoin and crypto mining in some regions due to electricity shortages, according to a new report from state news agency TASS, citing Deputy Energy Minister Yevgeny Grabchak.
“Mining will soon be banned at the state level in some regions,” Grabchak said.
The decision comes in response to excessive electricity consumption by crypto miners, which has led to power outages in regions including the Far East and southern Siberia. The energy resources available in these regions are limited and they do not have the infrastructure necessary to accommodate large-scale mining operations.
The government wants to prioritize national energy needs and ensure sufficient electricity supply for essential services. The specific regions affected by the potential ban have not yet been officially announced.
Cryptocurrency mining is now a legal activity in Russia following a law signed by President Vladimir Putin in August. However, not everyone is allowed to participate. The law, which took effect in November, restricts large-scale operations to registered Russian entities and sets energy limits for individual miners.
Last week, Russia enacted a law regulating the turnover of digital currencies, aimed at controlling cryptocurrency mining activities. The legislation grants the Russian government the power to ban mining activities in specific regions or territories, as well as mining basins.
As cryptocurrency mining gains traction, its energy consumption is a concern, especially as many regions struggle with energy crises.
Utility companies are monitoring the situation closely, as cryptocurrency mining can cause fluctuations in energy prices and strain resources, particularly during periods of peak demand.
Although some in the renewable energy sector see opportunities for crypto miners to use excess energy from renewable sources, they also express concerns about the overall sustainability of the sector’s energy demand.
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