Russia has announced significant restrictions on cryptocurrency mining across several regions, aiming to address rising electricity demands and a strained power grid. The ban, set to last until 2031, impacts six Caucasus regions and parts of Ukraine under Russian control.

Starting December 1, three southeastern Siberian regions near Lake Baikal, home to some of the largest crypto mining operations, will enforce a six-year seasonal mining ban during winter’s peak electricity demand. These regions have been attractive to miners due to low electricity costs and well-established infrastructure. The Energy Ministry estimates that crypto mining accounts for 16 billion kilowatt-hours annually, about 1.5% of the nation’s electricity usage.

Russia’s crypto mining sector saw a surge following China’s 2021 mining ban and a rise in Bitcoin’s value. International sanctions after Russia’s invasion of Ukraine in 2022 further fueled the boom, as traditional banking avenues became limited. This led the Kremlin to legalize mining and explore digital tokens for cross-border payments.

However, this growth has put immense pressure on the country’s power grid. Military and industrial operations linked to the war have added to the electricity demand. President Vladimir Putin has voiced concerns about the “uncontrolled growth” in power demand from mining hubs.

“Power consumption in the nation increased 1.4% last year and is predicted to grow at an average rate of 2.4% yearly from 2025 through 2027,” the Energy Ministry reported. Heatwaves this summer caused blackouts in southern regions, affecting up to 2.5 million residents.

The mining restrictions highlight the government’s efforts to balance economic gains from cryptocurrency with maintaining grid stability. These bans reflect growing apprehension over the environmental and infrastructural toll of unchecked crypto mining expansion.

Source: Russian Crypto Mining Faces Ban Until 2031