The Russian government has imposed a ban on cryptocurrency mining in ten of its regions for a duration of six years. This decision, reported by the state-owned news agency Tass, cites the high power consumption rates of the crypto mining industry as the primary catalyst for this prohibition. It is well-known that cryptocurrency mining demands substantial energy, with operations already accounting for almost 2.5 percent of the United States’ total energy use.
This ban is set to commence on January 1 and will remain in effect until March 15, 2031. The Council of Ministers in Russia has indicated that further restrictions may be necessary in other regions, particularly during times of peak energy demand. Conversely, there is also a possibility that the ban could be temporarily lifted or adjusted in certain areas if a government commission assesses changes in energy demand and determines that alterations are warranted.
Cryptocurrency mining was fully legalized in Russia only recently, on November 1, following a tumultuous history with the practice. Miners in Russia are required to register with the Ministry of Digital Development, and their energy consumption is subject to continuous monitoring.
While Russia prohibited the use of cryptocurrencies as legal tender in 2022, it still permits their use for cross-border payments. This allowance is largely perceived as an effort by Russia to circumvent international sanctions imposed following its invasion of Ukraine.
Russia is not alone in curbing cryptocurrency mining due to the industry’s excessive energy demands. In 2022, Kosovo banned crypto mining to preserve electricity during an energy crisis. Similarly, Angola enacted a ban in April 2024, which goes further by criminalizing the mining of cryptocurrencies. Additionally, several European nations, including Iceland and Norway, have begun to strictly regulate the industry to address energy shortages.
