Moscow Enacts Year-Round Ban on Bitcoin Mining to Alleviate Power Strain

Moscow Enacts Year-Round Ban on Bitcoin Mining to Alleviate Power Strain

Moscow and surrounding regions, including parts of Kursk, are set to observe a year-round ban on Bitcoin mining as part of a new government decree aimed at stabilizing the power grid and addressing increasing energy demands. This ban will remain in effect through December 31, 2032, according to local media reports.

Details of the Ban

The decree, known as No. 936, was signed on July 25, with its implementation published on July 31. This measure not only prohibits crypto mining but also bars participation in crypto mining pools. The Russian Energy Ministry has stated that this decision is critical to mitigate the risks of power shortages in the region caused by energy-intensive mining operations.

Impact of Mining on Power Supply

Bitcoin mining in Russia has grown significantly, contributing an estimated 175 exahashes per second, equating to 16.4% of Bitcoin’s global computing power during the first quarter. However, Moscow’s mining activities consume approximately 1 gigawatt of the local power system, while capacity could rise to 3.6 gigawatts, representing 17% of peak electricity demand by 2032. These figures have heightened concerns about the sustainability of the power grid amidst escalating energy needs.

Context of Government Regulations

This restriction comes amid ongoing Western sanctions against Russia, which have influenced the country’s approach to cryptocurrency. Since legal changes in late 2024, Russian companies have utilized domestically mined Bitcoin for international transactions to circumvent these sanctions. However, the Russian parliament maintains a ban on domestic crypto payments, allowing exceptions solely for foreign trade and transactions involving mined assets.

Conclusion

The ban on Bitcoin mining in Moscow and parts of Kursk reflects the government’s priority to secure power supply amidst growing consumption from mining operations. As energy-intensive industries grapple with restrictions, the future of Bitcoin mining in Russia remains uncertain.