From January 1, 10 regions of Russia will see cryptocurrency mining banned on their territory until 2031. Why is this?
Russia imposes geographic restrictions on cryptocurrency mining
From January 1st, Russia will ban cryptocurrency mining in 10 of its regionsuntil March 15, 2031. As reported by the local news agency Tass, these are the regions of Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, Donetsk and Lugansk.
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What is striking is that, with the exception of the last two cities located in Ukrainian territory, the other 8 regions are located close to the border with Georgiawith whom Russia shares tensions. For its part, the Cabinet of Ministers explains that these restrictions are in reality aimed at “ maintain a balance in energy consumption taking into account the needs of industry ».
Furthermore, the scope of those measures could evolve over time. For example, the Irkutsk regions, Buryatia and Transbaikalia will also see temporary bans from January 1 to March 15, and then from November 15 to March 15 in subsequent years.
Still on the energy aspect, certain regions of Russia, including some mentioned previously, see their electricity prices subsidized, where energy costs more in other regions. This can then lead cryptocurrency miners to choose one geographic area over another.
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For Sergey Kolobanov, deputy director of the Center for Economics of the Energy and Fuel Complex Sectors, this decision coincides with the end of this system, thus suggesting a lifting of restrictions when prices are smoothed:
So-called interregional cross-subsidization, where the low cost of electricity in regions under regulated contracts is de facto compensated by producers and consumers in other regions. The restrictions on cryptocurrency mining are aligned with the end of the transition period for the removal of this pricing advantage.
???? Also read — Russia: a State Duma deputy proposes the creation of a strategic reserve of Bitcoins (BTC)
More widely in the country, a tax framework was adopted for mining and trading last monthwhile more recently, a Duma deputy suggested the idea of creating a store of value in Bitcoin (BTC).
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Source : Tass
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Since 2021, I have devoted my free time to seriously educating myself on cryptocurrencies in order to acquire maximum knowledge and credibility. I often have the opportunity to conduct interviews with influential figures in the blockchain industry. I also conduct in-depth analyzes on Web3 themes to offer exclusive content to Cryptoast readers.
Vincent Maire
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