Russia to ban Bitcoin mining in select regions due to power shortages
President Vladimir Putin recently signed a law focusing on the oversight of digital asset circulation.
Key Takeaways
- Russia will enforce crypto mining bans in energy-deficient regions.
- The government aims to address power shortages caused by high electricity consumption.
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Russia is considering banning Bitcoin and crypto mining in certain regions due to electricity shortages, according to a new report from the state news agency TASS, citing Deputy Minister of Energy 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 areas such as the Far East and South of Siberia. There have been limited energy resources available in these areas, and they lack the infrastructure to host large-scale mining operations.
The government wants to prioritize domestic energy needs and ensure sufficient power supply for essential services. The specific regions affected by the potential ban have not yet been officially announced.
Crypto 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, effective in November, restricts large-scale operations to registered Russian entities and sets energy limits for individual miners.
Last week, Russia enacted a law regulating digital currency turnover, aiming to control crypto mining activities. The legislation grants the Russian government the authority to prohibit mining activities in specific regions or territories, as well as in mining pools.
As crypto mining has increasingly gained traction, its energy consumption has been a subject of concern, particularly as many regions grapple with energy crises.
Utility companies are monitoring the situation closely, as crypto mining can lead to fluctuations in energy prices and strain on resources, especially during peak demand periods.
While some in the renewable energy sector see opportunities for crypto miners to utilize excess energy from renewable sources, they also express concern about the overall sustainability of the industry’s energy demands.
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