On October 30, Evgeny Grabchak, Russia’s Deputy Energy Minister, announced that the country will soon impose restrictions on cryptocurrency mining in regions facing critical electricity shortages. Grabchak indicated that mining, often viewed as a precursor to digitalization, may be banned at the state level in specific areas due to the pressing energy crisis.
During a discussion at the RBC tech forum, Grabchak highlighted that regions such as the far east, southwestern Siberia, and southern areas are experiencing severe energy deficits. He noted that meeting the power demands in these regions will be impossible until at least 2030, underscoring the urgency of the situation.
This mining restriction announcement follows a significant legislative development: Russian President Vladimir Putin recently signed a law regulating cryptocurrency circulation, which will take effect on November 1. This legislation empowers the government to prohibit crypto-related mining in designated areas and establishes guidelines for enforcing these restrictions.
Additionally, the new law includes provisions to limit the advertisement of cryptocurrency and related services. In August 2024, Yandex, Russia’s leading search engine, revised its advertising policies to ban ads for any crypto-related services, which encompasses exchanges, blockchain services, mining, smart contracts, and initial coin offerings. Ads promoting earnings from these activities are also prohibited, along with services that check crypto wallets and transactions for potential money laundering.
Moreover, there are discussions within the Russian Finance Ministry about introducing a tax on electricity consumption by cryptocurrency miners, although no final decision has been reached yet.
The combination of these regulatory measures signals a tightening grip on the cryptocurrency sector in Russia, particularly in light of the ongoing energy challenges. As the situation develops, stakeholders in the crypto industry will be closely monitoring the implications of these restrictions on mining operations and the broader market landscape.
October 2024, Cryptoniteuae
