Russia proposes to restrict cryptocurrency mining in 13 regions, including Irkutsk and the occupied Ukrainian territories, until 2031 to ensure energy supply.
The Russian government is considering imposing restrictions on cryptocurrency mining activities in 13 regions across the country, in order to address energy security concerns, particularly during the peak electricity consumption season from autumn to winter. The move comes after Russia officially passed legislation regulating the cryptocurrency industry in August and October 2024, marking a significant shift in the country's approach to this rapidly evolving technology sector.
The meeting of the government commission on the development of the electric power industry, chaired by Deputy Prime Minister Alexander Novak on November 19, highlighted concerns about the potential for electricity shortages. Officials have proposed restricting cryptocurrency mining, a highly energy-intensive activity, in areas vulnerable to power deficits.
The list of affected regions includes Irkutsk, a major cryptocurrency mining hub, as well as the occupied Ukrainian territories of Donetsk, Luhansk, Zaporizhzhia, and Kherson. Other Siberian regions, such as a part of the Republic of Buryatia and Zabaikalsky Krai, are also on the list.
Impact on the mining industry
The restrictions, if approved, will be seasonal, taking effect from autumn to winter each year until 2031. This decision could have significant consequences for Russia's cryptocurrency mining industry, particularly for companies like BitRiver, which have invested heavily in infrastructure in regions like Irkutsk. According to local sources, the city of Bratsk, part of the Irkutsk region, is home to BitRiver's first and largest data center, which was inaugurated in 2019.
Siberian regions like Irkutsk have long been attractive destinations for cryptocurrency miners due to low electricity prices, a favorable cold climate for cooling equipment, and abundant renewable hydropower resources, such as the 4,500-megawatt Bratsk hydroelectric power plant.
Russia's proposal to restrict cryptocurrency mining reflects the tension between the development of this emerging technology sector and the need to ensure national energy security. While the new legislation aims to establish a legal framework for cryptocurrency mining, it also imposes certain restrictions, including a ban on foreign individuals participating in mining in Russia and granting the government the authority to limit mining activities in areas at risk of power shortages.
