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Russia Extends Regional Crypto Mining Ban to 6 Years as Energy Issues Escalate
In a move aimed at addressing the country’s energy consumption balance and mitigate the ongoing crisis, the Russian government has extended its ban on local crypto mining operations to six years. The decision comes amidst concerns over the impact of cryptocurrency mining on Russia’s energy supply.
As previously reported by CryptoPotato, Russia had initially imposed a winter ban on crypto mining operations in at least ten regions due to rising energy consumption issues. However, this latest development underscores the government’s commitment to addressing the crisis head-on.
The updated ban now prohibits local entities from continuing their mining activities in these regions until March 2031. This decision applies to areas like Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, the Donetsk Republic, the Lugansk People’s Republic, Zaporozhye, and Kherson.
While the list of affected regions remains subject to change based on the government’s energy development decisions, additional territories in Irkutsk, Buryatia, and Zabaikalsky Krai will also face a temporary ban. These areas are instructed to halt mining activities during peak energy consumption periods between January 1st and March 15th each year.
The Russian government has taken this drastic measure due to the significant strain cryptocurrency mining is putting on the country’s energy resources. With Russia now ranking as the world’s second-largest crypto miner, following the United States, the need for action is more pressing than ever.
According to data available, crypto mining consumes at least 16 billion kilowatt-hours of electricity annually in Russia alone. This staggering figure accounts for a concerning 1.5% of the country’s overall energy consumption, further exacerbating issues with regional energy imbalances and cross-subsidization.
It is crucial for the government to address this imbalance as the situation has created an unbalanced electricity payment system across several regions. Experts have highlighted that this issue stems from ‘inter-regional cross-subsidization,’ where low-cost electricity in certain areas is covertly compensated by producers and consumers in other regions.
As Russia continues to navigate the cryptocurrency landscape, it is essential for investors and stakeholders alike to closely monitor these developments.
Source: cryptopotato.com
