Russia's big move! Intends to ban encryptionMining in 10 regions, why the sudden shift after legislation allowed it?

Expected to take effect from 2025, Mining activities will be significantly tightened.

According to the foreign media TASS, the Russian government recently announced that it will ban cryptocurrency mining in ten regions of the country from January 1, 2025, until March 15, 2031. The affected regions include Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, as well as the recently annexed Donetsk, Luhansk, Zaporizhzhia, and Kherson. Officials stated that this is to alleviate the pressure on energy supply and avoid insufficient industrial production or domestic electricity during winter peak demand.

This ban not only prohibits individuals and businesses from engaging in Mining, but also prohibits participation in any Mining Pool activities. Although Mining is still legal in other parts of the country, this is the most extensive and strict blockade by Russia against the blockchain industry, aiming to prevent power shortages caused by massive energy consumption in cryptocurrency Mining.

3 Regional seasonal control, balancing industrial energy use

In addition to the above 10 strictly regulated areas, Russia also implements 'seasonal restrictions' in 3 Siberian regions such as Irkutsk, Buryatia, and Zabaikalsky. That is to say, these three places do not directly impose a comprehensive ban, but restrict cryptocurrency Mining activities during high electricity demand in winter (from January to March 2025, and from November to March each year in the future) to free up power for other industrial or domestic use.

Officials emphasize that the above list may be dynamically adjusted based on the recommendations of government committees, but the core goal is always to ensure the balance of Russia's power supply and to take into account the stability of regional industries.

Regulatory background: Legislation once allowed Mining, now turning again

In fact, Russia legalized cryptocurrency mining in August this year and requires miners to register with the tax authorities and declare mining income. However, the restrictions imposed on many regions this time are mainly due to the tight power supply in winter and concerns that mining will exacerbate the burden on the power grid. The Russian Ministry of Finance also pointed out that in recent years, with the increasingly hot global cryptocurrency market, many regions have attracted a large number of miners due to the 'low electricity price', causing the local power supply system to be overloaded.

A series of industrial expansion projects promoted by the government has intensified the competition for energy, leading to stricter regulations on mining clients. Vladimir Klimanov, director of IPEI in Russia, pointed out: 'Due to the relatively cheap electricity in the North Caucasus or Far East regions, the actual cost is borne by residents in the central region; therefore, through these restrictions, a more equitable operating environment can be achieved overall.'

The future of Mining is uncertain, and Russian strategy has attracted attention

Faced with this new regulation, a large number of miners who are located in restricted areas or subject to seasonal restrictions may be forced to move to other energy-abundant regions in Russia or simply leave the country. Although Russia once recognized the legality of Mining at the legal level, the current extreme measures taken by the government also show its compromise in the energy crisis. For the crypto community, this may impact the domestic Mining industry in Russia in the short term; on the other hand, some operators may expand their presence in unrestricted areas.

Overall, the ban and seasonal restrictions imply that the Russian authorities are accelerating their efforts to strike a balance between 'protecting grid stability' and 'expanding cryptocurrency Mining revenue.' The Mining industry still holds potential in the country, but faced with urgent winter energy demands, the government has chosen administrative controls as a means, which will continue to affect the development of the blockchain ecosystem in certain regions of the country until 2031. The subsequent implementation and the potential emergence of conflicts such as smuggling of mining machines and illegal Mining will also continue to receive high attention from the market and the international cryptocurrency community.

Further Reading Want to compete with Trump? Putin: No one can stop Bitcoin, how Russia plans to lay out cryptocurrency New developments in crypto struggle! Putin signs crypto tax law, Russia recognizes Bitcoin as an asset No wonder Russia loves cryptocurrency! By mining, it has increased tax revenue by over 500 million pounds, successfully evading sanctions?

【Disclaimer】There are risks in the market, and investment needs to be cautious. This article does not constitute investment advice, users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their specific circumstances. Invest at your own risk.

"Russia's Big Move! Proposes to Ban Cryptocurrency Mining in 10 Regions, Why the Sudden Turnaround After Legalization?" This article was first published in "Crypto City".