Russia Bans Bitcoin Mining in Regions to Balance Energy Demand

Editor’s note: the article has been clarified that Donetsk, Luhansk, Zaporizhia and Kherson are Russia-occupied Ukrainian territories.

While Russia has formally legalized Bitcoin mining, it is imposing restrictions on such activities in certain regions until 2031 in order to balance energy demand.

According to a recent report by the TASS news agency, the Russian government has passed a resolution to ban Bitcoin mining in Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, as well as the Russia-occupied Ukrainian territories of Donetsk, Luhansk, Zaporizhia, and Kherson.

The ban will take effect from January 2025 and remain in place until 2031, the report states. Additionally, mining will be temporarily prohibited during peak energy consumption periods in some areas of the Irkutsk Region, Buryatia, and the Zabaykalsky Krai. In 2025, these periods will be from January 1 to March 15, with similar restrictions continuing each year from November 15 to March 15.

However, TASS also reported that government officials clarified that the list of affected regions may be adjusted based on further decisions. The goal of these restrictions is to maintain a balance in energy consumption, taking into account the needs of industrial sectors.

Although the latest data on Bitcoin’s global geographic distribution is unavailable, Russia is believed to remain one of the top hotspots for mining, second only to the U.S. However, it remains to be seen how much Bitcoin hashrate will be offline, if at all, in the affected Russian regions starting from the New Year.

As previously reported, Russia officially legalized Bitcoin mining in August, with the law taking effect in November. Under the new regulations, individuals and institutions must report their associated crypto assets and wallet addresses to the government.

According to TASS, individuals are allowed to mine cryptocurrency in Russia within a monthly limit of consuming 6,000 kilowatt-hours of energy.