Russian government finds no grounds for mining ban expansion

Russia has no plans to impose further restrictions on cryptocurrency mining as it’s not currently facing power shortages, a government official announced.

The vast, energy-rich country, which is a major mining destination, has limited or completely banned the minting of digital coins in a number of regions experiencing electricity deficits.

Russian government halts mining ban expansion

Russia’s Ministry of Energy sees no grounds for introducing more bans on crypto mining, Andrei Maksimov, director of its Electric Power Development Department, revealed to the TASS news agency.

Maksimov said the federal government has not received new suggestions from local authorities for such measures, while noting the country’s energy system is now coping with the loads.

Also quoted by the leading Russian business news outlet RBC, the high-ranking Minenergo representative explained:

“There have been no such requests from governors. Everything is fine. If there are no shortages, then there are no grounds. Our energy system is generally functioning well.”

His statement is positive news for Russian mining companies, which have been dogged by the threat of having to move around the country in search of places where their presence is not unwanted.

Russia’s crypto mining industry has been growing, especially after it was recognized as an industrial activity and legalized last year.

But the concentration of miners in certain territories with low electricity rates caused problems with energy supply for other consumers.

This prompted local officials to seek Moscow’s approval for partial or full prohibition of mining operations. Initially imposed seasonal restrictions were eventually upgraded to year-round bans in some cases.

Mining restrictions remain in place across multiple regions

Earlier this year, mining in several regions facing energy shortages was prohibited until the spring of 2031. These include the Russian republics in the North Caucasus as well as the occupied parts of the Ukrainian oblasts of Donetsk, Luhansk, Zaporizhzhia, and Kherson.

Restrictions in the Republic of Buryatia and Zabaykalsky Krai are in effect only during the cold winter months, when heating requires a lot of energy.

A similar regime in the southern part of Irkutsk Oblast was made permanent at the request of the governor of the Siberian Oblast.

The governments of the republics of Buryatia, Khakassia, Karelia, as well as the Zabaykalsky Krai and Penza Oblast, asked for the same.

In June, a federal government commission refused to ban mining activities in Khakassia, citing a lack of adequate forecasts for the expected power deficits as well as decreasing distribution and tax revenues.

Karelia and Penza withdrew their requests at the meeting in Moscow, while decisions regarding the situation in Buryatia and Zabaykalsky Krai were postponed.

Energy ministry hopes for alternative solutions

Deputy Minister of Energy Yevgeny Grabchak stated that the department favors a more targeted approach that would help avoid banning cryptocurrency mining in some areas.

The ministry expects certain amendments to existing mining regulations to be adopted by the end of the year, which would provide alternative solutions to the current restrictive measures.

In July, Russia’s Deputy Prime Minister Alexander Novak instructed the energy ministry to finalize proposals to create a new category of electricity consumers of lesser importance for crypto miners.

This will allow Russian authorities to disconnect Bitcoin farms from the power grid during hours of peak consumption.

While recognizing Russia’s competitive advantages in the field of digital currency mining, Russian President Vladimir Putin justified the restrictions introduced in some corners of his country, stating during an economic forum in July:

“We were happy we had electricity surpluses in some regions. But they began mining there and we had to make certain decisions.”

His aide, Nikolai Patrushev, also noted the problem, highlighting as an example the electricity deficit registered in the Far Eastern Siberian Federal District, which reached 1.2 GW.

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