The future of cryptocurrency mining in Russia is in jeopardy. The Russian cabinet recently approved enacting a ban on crypto-mining operations in several regions of the country, including Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, the Donetsk and Lugansk People’s Republics, Zaporizhia and Kherson regions.

In the issued resolution, the Russian cabinet also specifies that certain areas will be subject to a seasonal ban in other regions, limiting the activity from January 1 to March 15 in 2025, and from November 15 to March 15 in the next years. The bans will start being applied on January 1 and will be in effect until March 15, 2031.

Read more: Russian Energy Ministry Proposes Periodic Crypto Mining Restrictions in Certain Regions

While Russian authorities cite energy shortages in some regions as the main cause of these restrictions, others believe the end of energy subsidies and this prohibition are related.

Sergey Kolobanov, deputy director of the Center for the Economy of Fuel and Energy Sectors at the Center for Strategic Research, stated:

The terms of restrictions on cryptocurrency mining are synchronized with the end of the transition period for the elimination of this benefit. After the market liberalization, the restrictions in this part may well be lifted, provided, of course, that there is sufficient capacity.

The resolution also states that this is a work in progress and that other regions might be subject to these restrictions later to maintain the balance of energy consumption.

Deputy Prime Minister Alexander Novak remarked on this, stating recently that social usage of this energy will have priority over other applications. In an interview, Novak stressed that these restrictions might be introduced at the request of regional authorities. “Of course, restrictions will be introduced to ensure the connection of social facilities and enterprises under construction first,” he stated.

In August, President Putin signed a bill legalizing cryptocurrency mining in Russia, and it went into effect in November. The document gives the government authority to restrict these activities in certain regions.

Read more: Putin Signs Law to Regulate Crypto Mining in Russia

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