A new announcement from a Russian Deputy Minister of Energy claims that the state will ban crypto mining in several regions. The cited cause for these temporary bans is electricity grid deficits.
Russia still backs crypto as a cross-border payments solution, as the US Treasury introduced new sanctions today.
Russia’s Crypto Strategy
An October 30 report from Russian state news agency TASS claims that crypto mining operations must cease in certain regions of the country. Deputy Minister of Energy Yevgeny Grabchak made this announcement, clarifying that this temporary ban was due to electricity shortage concerns in these areas.
“Mining will soon be banned at the state level in some regions. We, for example, already have deficit zones — the Far East, the southwest of Siberia, the South. There we cannot give large capacities to anyone in the long term until 2030,” Grabchak claimed at the RBC Tech Forum.
Read more: The Best Countries to Mine Cryptocurrency in 2024
Russia has emerged as a leading crypto miner since 2023, thanks to newfound state support for the industry. Izvestia, one of the nation’s largest newspapers, determined that Russian firms mined over 54,000 BTC that year. Nevertheless, these power grid concerns will temporarily halt several of these operations. The report did not include an exhaustive list of affected areas.
These restrictions come alongside a series of comprehensive crypto regulations the Russian government passed this year. The specific law in question will take effect on November 1 and empower the state to take a more direct role in mining regulation. In addition to enabling this regional ban, the law also reserves the right to regulate mining pools.
However, this temporary ban does not suggest a broader turn against the crypto industry. Last week, the Russian delegation took a leading role in recommending crypto at the BRICS Summit. Russia endorsed various strategies to establish BRICS Pay, a crypto-based system of cross-border payments between BRICS members. Delegates also suggested Bitcoin for this purpose.
A key concern for Russia, and BRICS members in general, was crypto’s use case in avoiding US sanctions. Today, the US Treasury introduced new sanctions targeting individuals and companies doing business with Russia. These sanctions impact 275 entities in 17 countries, including BRICS members India and China.
Read more: Top 3 Methods for Cross-Border Money Transfer Using Crypto
In other words, the Russian government’s interest in cross-border payment solutions is well-founded. The temporary mining ban may impact Russia’s share of the Bitcoin hash rate, but not its overall support for the industry.
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