The Russian government is now proposing to limit Bitcoin mining in 13 regions due to an outage during the leading. If approved, the move could have severe implications for the nation’s cryptocurrency mining, especially in areas with affordable power, such as Irkutsk, with a fresh climate.
The restrictions discussed at the government commission meeting chaired by Deputy Prime Minister Alexander Novak on November 19 will limit mining in areas with an energy shortage problem. Some limitations would apply during the autumn-winter heating season, and the target would continue until 2031.
The regions most affected are the Irkutsk region, Siberian territories, parts of the Republic of Buryatia, and Zabaikalsky Krai.
Measures will also be adopted for the Ukrainian-controlled areas of the Donetsk and Luhansk regions, Zaporizhzhia, and Kherson regions. The same would apply to the North Caucasus, Dagestan, and Chechnya areas, although it is necessary to do this.
Russia’s Irkutsk Faces Major Impact from Mining Restrictions
Irkutsk, which hosts several crypto miners, might be the hardest-hit region. The area was the first and most significant for BitRiver’s data center, which began working in Bratsk in 2019. It has cheap hydroelectric power, low electricity tariffs, and favorable weather conditions that have encouraged miners to relocate.
The major producer of hydroelectricity, Bratsk’s hydroelectric power station, with an installed generation capacity of 4,500 MW, has been vital to the mining economy of Irkutsk. Therefore, sulfur mining may compromise some companies that source their materials from such a location.
Third, legal and regulatory constraints are problematic because they precipitate and contribute to continued restrictions.
Legal/regulatory high-risk threat identification = 41
Table 7 summarises the legal and regulatory issues highlighted by the participants outlined in this study.
In recent years, the Russian mining sector has been experiencing a decrease in the extent of regulatory discretion. Mr. Putin endorsed these laws in August and October 2024 to define the regulation of mining cryptocurrency. However, they have also been labeled as full of legal ambiguities and restrictive provisions, some of them prohibiting foreign players from mining in Russia.
The proposed restrictions are an additional layer of complexity or barrier parallel to government-efficient energy, not crypto utilization.
Cryptocurrency mining has, therefore, emerged as one of the most significant elements of the evolving Russian digital economy. Nevertheless, one disadvantage is the growing need for electricity for mining purposes.
Given the development of the global crypto space with the Russian Federation as an example, one can state that the major question for future economies is not only the possibilities of the progressive development of the currency but also the factor of resource management.
The outcome of these restrictions will determine the further development of Russia in the sphere of mining using cryptocurrency within the paradigm of regional energy management.
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