- Russia will ban Bitcoin mining in several regions starting January 1, 2025, for six years
- The ban aims to control energy consumption and address economic disparities in economically disadvantaged regions
- The conflict in Ukraine has strained energy resources, making the ban crucial for energy stability
The Russian Government recently announced that Bitcoin mining will be forbidden in several regions of the country. This measure is set to start on January 1st, 2025, and will be eligible for 6 years.
Russia is implementing the mining ban as an attempt to control energy consumption and regional economic disparities. The Russian regions affected by the ban are some of the most economically disadvantaged, including Chechnya, Lugansk People’s Republic, Kabardino-Balkaria, North Ossetia, Kherson Region, Donetsk People’s Republic, Karachay-Cherkessia, Zaporizhia Region, Dagestan, and Ingushetia.
Temporary restrictions are also to be implemented in regions like Irkutsk, Buryatia, and Zabaikal Krai. Although seemingly a very radical measure, the Government also mentioned that these restrictions are not set in stone, and changes could emerge if the energy consumption committee sees fit.
The fact that most regions hit with the mining ban are from annexed territories has raised criticism of the government’s potential favoritism. However, the ongoing conflict in Ukraine has strained energy resources in these areas, making it crucial to manage consumption effectively. The ban aims to ensure energy stability and address economic disparities in regions affected by the war.
Cryptocurrency mining under the proof-of-work consensus mechanism has been known for its high energy consumption. In 2024 alone, Bitcoin’s global energy consumption surpassed 150 terawatt-hours—about the same as the consumption of medium-sized countries like Argentina, or 14 million U.S. households.
Energy consumption from mining has also become a major talking point for regulators over the past decade. In 2022, Kosovo completely outlawed crypto mining during one of the country’s most severe energy crises. Also, some of the world’s largest economies like Germany, France, and China have implemented strict regulations on mining in order to manage energy use and address environmental concerns.
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