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Russia restricts cryptocurrency mining in low-energy regions
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MOSCOW (Reuters) – Russia has banned cryptocurrency mining in several Siberian regions to prevent
MOSCOW (Reuters) – Russia has banned cryptocurrency mining in several Siberian regions to prevent power shortages during the winter and has restricted it in areas of Ukraine that it has declared annexed, a government commission announced on Tuesday.
The ban will be enforced during the winter months in three regions near Lake Baikal, where cryptocurrency mining has flourished in recent years due to the low cost of electricity, primarily generated by large hydropower plants.
In the annexed areas of Ukraine, much of the energy infrastructure has been destroyed since Russia sent in its forces in 2022, leading to power shortages.
According to official estimates, cryptocurrency mining in Russia consumes 16 billion kilowatt-hours annually, or about 1.5% of the country’s electricity consumption, creating challenges for regions with harsh climates.
Along with the United States, China, Kazakhstan, and Canada, Russia is a global leader in crypto-mining. This year, Russia enacted a new law regulating the activity and introduced taxes, expecting to collect up to 200 billion roubles ($2 billion) a year from miners.
($1 = 100.5705 roubles)
(Reporting by Gleb Bryanski; Editing by Tomasz Janowski)
Cryptocurrency mining is the process by which transactions are verified and added to the public ledger, known as the blockchain. Miners use powerful computers to solve complex mathematical problems to earn cryptocurrency rewards.
Energy consumption in cryptocurrency mining refers to the amount of electricity used by mining operations to power the hardware required for mining activities. High energy consumption can lead to environmental concerns.
Regulations in cryptocurrency aim to provide a legal framework for the use and trading of cryptocurrencies. They help prevent fraud, protect consumers, and ensure compliance with financial laws.
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