Addressing soaring energy consumption, the Russian government has announced a six-year ban on cryptocurrency mining in 10 regions, effective January 1, 2025. The ban, reported by Russian state agency Tass, will last until March 15, 2031.
The decision includes temporary restrictions in specific regions during periods of peak electricity demand. These include Dagestan, North Ossetia, and Chechnya, but the list may evolve as energy usage patterns shift.
Seasonal restrictions will be imposed in the Siberian regions of Irkutsk, Buryatia, and Zabaikalsk where mining activities will be curtailed during winter months when heating-related energy demands peak.
In July 2024, President Vladimir Putin signed a law officially legalizing cryptocurrency mining, which went into effect in August. This law requires businesses and entrepreneurs to register with the Ministry of Digital Development to conduct mining activities, while individuals can operate unregistered with energy consumption limits of 6,000 kilowatt-hours per month.
In November 2024, a tax framework was introduced to bring transparency to the Russian mining sector.
- Tax Exemptions: Mining and cryptocurrency sales are exempt from VAT.\n
- Income Tax: Cryptocurrency earnings are taxed at 13% for amounts up to 2.4 million rubles and 15% for higher amounts.\n
- Corporate Tax: Mining businesses will face a 25% corporate tax starting in 2025.
In 2023 alone, the industry consumed between 1.5 and 1.7 gigawatts of power and 16 billion kilowatt-hours, a threefold increase from the prior year. The government’s decision also considers regional electricity subsidies that make mining particularly lucrative in areas with lower energy costs.
While these measures aim to curb excessive power consumption, the ban may impact Russia’s standing as the second-largest cryptocurrency mining nation. In 2023, Russia mined approximately 54,000 Bitcoins, representing 16.4% of the global output and contributing significantly to the economy with a potential 50 billion rubles in taxes.