Russia to impose regional controls over crypto mining starting Jan 2025

Russia’s government has published a draft resolution on banning or providing restrictions on mining locally. The ban will take effect on Jan. 1, 2025, and run until Mar. 15, 2031. According to TASS , the mining ban will take place in Dagestan, Ingushetia, Chechnya, Kabardino-Balkaria and North Ossetia. The ban will include mining and participation in pools. The order has also not been entered into force in Luhansk and Donetsk People’s Republics, as well as some localities of Zaporizhia and Kherson. You might also like: Bitcoin’s surge sparks 30% hike in mining gear prices as buyers move to Hong Kong The same restrictions will also extend to certain sites in the Irkutsk Region, Buryatia, and Zabaikalsky Krai during peak load hours. By 2025, this will be enforced between Jan. 1 and Mar. 15, with the years to follow seeing bans take effect from Nov. 15 through Mar. 15. This is a set of policies that manage how much energy is consumed and distribute it evenly across different industries. Experts are of the opinion that the crypto mining ban is due to energy shortages and the subsidized price at which bandwidth is available in some markets. Sergey Kolobanov, the Center for Strategic Research of this mechanism, has become one of the arguments to justify restrictions on interregional cross-subsidization, which compensates for cheap energy in regulated regions. Kolobanov states that the limitation is in line with the end of the transition period aimed at removing such benefits. Power privatization is expected to eliminate the need for such bans one day. You might also like: Crypto mining giant Marathon plans $700m convertible note to buy Bitcoin The Cabinet of Ministers added that a similar list could be revised in the light of proposals from an electricity commission advising on what such zones might comprise. Experts say the authorities justified the ban on the grounds of energy shortages and price disparities in electricity. The regulated contract states in question enjoy lower electricity prices, which are effectively cross-subsidized by the producers and consumers of other regions. Earlier, Russia imposed 15% tax rule on Bitcoin ( BTC ) mining profits on Nov. 18. The world’s largest country’s current mining ban is a result of ongoing energy shortages and differentiated electricity pricing, as per a previous TASS report . Further, World Energy Outlook 2023 states that Russia’s power generation decreased in 2022 due to lower industrial demand and export sanctions, while electricity consumption increased by 5.8% in industrial regions by mid-2023. Subsidized regions such as Irkutsk, where electricity is sold at $0.01 per kWh, attracted miners and straining grids during winter peaks. The ban will help address energy equity and balance such imbalances while preparing to privatize power frameworks. Read more: India risks losing $2b in tax revenue as crypto traders shift to offshore platforms: report