Russia Eyes Temporary Crypto Mining Ban in Power-Starved Regions Amid Energy Shortages

• Russia could ban crypto mining during power shortages in energy-starved areas.
• The country’s Ministry of Energy proposed that crypto miners generate electricity in regions with shortages.
• Russia’s government is also looking into new tax options for the various sections of crypto mining.

Russia is exploring the possibility of banning crypto mining in low-energy regions during power shortages.

The proposal comes as Russia’s Ministry of Energy looks to tighten control over the “uncontrolled growth” of crypto mining, which the government legalized in the summer.

Potential Russian Crypto Mining Ban

According to local news sources, on Wednesday, Oct. 23, Deputy Minister of Energy Yevgeny Grabchak proposed that crypto miners should not gain electricity at general market prices in subsidized regions.

In several regions across Russia, consumers buy electricity under-regulated contracts. These often come with government subsidies to ensure affordability, particularly for households and small businesses.

Grabchak claimed it would benefit the government if crypto miners generated their own electricity in regions with shortages.

“We are putting forward an initiative that in regions with shortages, mining should be prohibited during periods of shortages,” Grabchak said.

“Therefore, it is advisable to cancel the non-discriminatory approach for mining and encourage them to switch to their own generation in zones of shortages,” Grabchak added.

The proposal follows the government’s passing of a new law, which could become enforceable on Nov. 1. The law gives the Cabinet of Ministers the authority to impose a blanket ban on crypto in specific regions or the whole country.

Tax on Mining

In addition to curbing the mining industry, the government is also looking into new tax options for the various sections of crypto mining.

According to State Duma Deputy Anton Gorelkin, one of the new options is income tax on mining in data centers.

Under the proposed two-stage framework, miners would face an initial tax payment on their mined coins as soon as they enter their digital wallets.

Then, in the second stage, the Federal Tax Service (FTS) would impose another tax payment or deduction of losses. This would occur when miners sell or transfer mined crypto, depending on its sale value.