The Russian cryptocurrency mining industry is booming, with demand for equipment tripling in just one year. What’s behind this rapid growth?
According to the latest report from the Russian news agency PRIME, in the fourth quarter of 2024, the demand for industrial mining equipment and services in Russia tripled compared to the same period last year.
This growth is linked to changes in the law issued by President Vladimir Putin in the summer of 2024. According to the new regulations, which will come into effect from November 1, 2024, businesses and individuals can engage in cryptocurrency mining after officially registering on the national miner register.
According to these regulations, legal entities and private entrepreneurs are allowed to mine cryptocurrencies after completing registration with a government agency. Individual miners do not need to register if their monthly electricity consumption does not exceed 6,000 kWh. However, if they exceed this threshold, they are forced to register as business owners.
However, as the industry grows, the Russian government has also begun to introduce new restrictions to manage energy consumption in many areas. A draft resolution from the government proposes to ban cryptocurrency mining in certain regions, effective from January 1, 2025, to March 15, 2031.
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The ban would affect regions such as Dagestan, Chechnya, and Ingushetia, as well as specific locations in Irkutsk, Buryatia, and Zabaikalsky Krai, especially during periods of peak energy demand.
The Russian government has cited energy shortages and price discrepancies as the main reasons for the restrictions. In regions with low-subsidized electricity, cryptocurrency mining has put a lot of pressure on the local power grid. Additionally, on November 18, 2024, Russia introduced a 15% tax on profits from Bitcoin mining.
