Russia Cracks Down on Crypto Mining Amid Winter Energy Crisis

As winter approaches, Russia, one of the world’s top cryptocurrency mining hubs, is gearing up to impose targeted bans on mining to address looming energy shortages. Alongside the U.S., China, Kazakhstan, and Canada, Russia has become a key player in the global mining scene.

However, with winter temperatures plunging and energy demands rising, the country is forced to make tough choices.

The Moscow Times reports that these restrictions will mainly affect Siberia and Ukrainian territories currently under Russian control.

Crypto Mining Restrictions During Winter Months

A government commission, led by Deputy Prime Minister Alexander Novak, has outlined the plan to ensure stable energy supplies during the heating season. Starting December 1, 2024, mining in Siberia will be suspended until March 15, 2025, with similar bans scheduled annually through 2031.

In addition, the North Caucasus and occupied Ukrainian regions will face a total mining ban from December 2024 to March 2031, with no seasonal exemptions, as reported by Kommersant.

New Regulations in Effect

These mining bans are part of a broader set of crypto regulations signed into law by President Vladimir Putin on November 1, 2024. The new rules aim to regulate mining activities and establish infrastructure for experimental cross-border cryptocurrency transactions.

While domestic crypto payments remain illegal, Russian lawmakers view these measures as a possible way to bypass international sanctions by using digital currencies.

The Energy Cost of Crypto Mining

As the world’s second-largest cryptocurrency mining country after the U.S., Russia uses about 16 billion kilowatt-hours annually for mining—roughly 1.5% of its total electricity consumption, according to the Energy Ministry. In addition to the mining bans, the new laws introduce taxes on mining activities, which could generate up to 200 billion roubles ($2 billion) annually for the Russian economy.

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Bitcoin Mining Difficulty Soars

Bitcoin’s mining difficulty has recently hit a record 102.29 trillion, reflecting the increasing computational power needed to secure the network. This key metric adjusts every two weeks to maintain steady block production despite fluctuations in miner activity. Since mid-2024, Bitcoin’s mining difficulty has increased by nearly 20%, driven by intense global competition.

At the same time, Bitcoin’s hash rate peaked at over 900 EH/s before stabilizing around 730 EH/s.

Russia’s decision to implement these mining bans highlights the country’s challenge of supporting the expanding crypto sector while ensuring enough energy is available during peak demand periods.