Crypto miners in two Russian regions may soon have their business activity permanently banned, according to the federal government in Moscow.
The Siberian territories are next in line to be added to a long list of areas where mining is already prohibited due to allegedly causing electricity shortages.
Moscow considers banning mining in Buryatia and Transbaikal
Bitcoin mining may be banned year-round in the Russian Republic of Buryatia and Zabaykalsky Krai (Transbaikal), a representative of the Ministry of Energy announced during a meeting in the Federation Council, the upper house of parliament in Russia.
Current restrictions there are of seasonal nature and are enforced only during the cold, fall and winter months of the year, when energy consumption peaks, noted Olga Arutyunova, deputy director of the ministry’s Department for the Development of the Electric Power Industry.
At the same time, the two administrative units constitute a single territory, when it comes to power generation and distribution, with the adjacent Irkutsk Oblast, in the southern part of which mining has been completely restricted until the spring of 2031.
The energy ministry official was speaking during a round-table discussion on the matter. Quoted by Senat Inform, an online publication covering the activities of the legislative chamber, Arutyunova stated:
“We are monitoring the situation there. If necessary, we will respond promptly and ban mining, as in the Irkutsk region, for the entire year.”
Russia legalized mining in 2024 to exploit its competitive advantages over other mining destinations, in terms of abundant energy resources and cool climates.
Both corporate entities and individual entrepreneurs are free to engage in the activity, as long as they register with the Federal Tax Service (FNS), including their hardware, and pay due taxes to the state.
The mining boom and the high concentration of mining enterprises in parts of the country offering low, often subsidized electricity rates, caused power deficits and frequent breakdowns of the grid.
As a result, local authorities in about a dozen Russian regions initially imposed temporary and, in some cases, eventually permanent measures to restrict mining, all with the approval of the executive power on the federal level.
In July, Russian Minister of Energy Sergey Tsivilyov suggested adopting legislative amendments that will allow other organizations to use some of the generation capacities currently occupied by mining companies.
That same month, his department was tasked to prepare regulations that would classify crypto farms as consumers of lesser importance, which can be remotely disconnected from the power grid at any moment distribution networks experience shortages.
Not all Russian officials think miners are a nuisance
The measures to curb electricity consumption in mining are mostly affecting legitimate, regulated businesses, and they have been complaining that the sudden changes in local regulations are forcing them to move equipment around the vast country.
Cryptocurrency miners have developed a bad reputation in the Russian society, according to Anton Gorelkin, first deputy chairman of the Committee on Information Policy, Information Technologies and Communications at the State Duma, the lower house of Russia’s legislature.
Speaking at a forum devoted to law in the digital space, and quoted by the business news portal RBC earlier this week, he elaborated:
“Despite the big step forward with legalization, the image of miners in the society is very negative. And the task of proving they are needed by the Russian economy lies with the miners themselves.”
Meanwhile, the chairman of the energy commission at the State Council, an advisory body to the President of Russia, pointed out that crypto mining makes sense for Russian regions rich in energy resources that cannot be transferred or are unprofitable to transport elsewhere due to their remoteness.
Quoted by TASS on Tuesday, Aisen Nikolayev elaborated:
“Mining and electricity generation for computing systems are especially relevant for remote areas with local energy resources, but without the possibility of exporting them.”
Nikolayev gave an example with Yakutia, or the Republic of Sakha, in the Russian Far East, of which he is the acting governor, noting that coal and gas extracted there can be utilized to power the energy-intensive computing in mining farms and data centers, thus helping develop the local economy.
