Russia is targeting key mining hubs in 13 regions to address power shortages from cryptocurrency mining.
Crypto Mining Restrictions Loom in Energy-Stressed Regions
Russia’s government is preparing to restrict cryptocurrency mining in 13 regions, including major hubs like Irkutsk and several occupied Ukrainian territories, citing energy supply challenges. The proposed measures aim to reduce power shortages during peak seasons, particularly in regions with critical energy demands.
Duration and Scope of Restrictions
The restrictions, if approved, will be in effect during the autumn-winter heating seasons until 2031. Besides Irkutsk, regions like Buryatia, Zabaikalsky Krai, and Dagestan are among those targeted.
These measures will significantly impact mining operations, particularly in Siberian regions like Irkutsk, known for their favorable conditions for crypto mining, including low electricity costs, abundant hydroelectric energy, and cold climates. For instance, Irkutsk’s Bratsk hydroelectric power station, with a 4,500 MW capacity, is a critical energy source for local mining activities.
Legal Framework and Industry Criticism
Recent laws signed by President Vladimir Putin in 2024 have laid the groundwork for regulating crypto mining but introduced restrictions, such as banning foreign entities from mining in Russia and empowering the government to enforce mining bans in energy-stressed areas. These laws, however, have drawn criticism from industry stakeholders over regulatory uncertainty.
Potential Impacts on Industry Leaders
Companies like BitRiver, heavily reliant on the cheap energy available in Irkutsk, face significant operational challenges under the new restrictions. Irkutsk hosts BitRiver’s first and largest data center, emphasizing the region’s importance to Russia’s mining landscape.
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