New Crypto Mining Ban Hits Russia: Full Restrictions for Key Areas Due to Power Shortages

According to Bloomberg, the Russian government has approved new measures to restrict cryptocurrency mining in response to ongoing power shortages. The new rules are set to take effect on December 1, with restrictions in place annually from November 15 to March 15 through 2031. As part of these measures, cryptocurrency mining will be entirely banned in several regions, including parts of the North Caucasus and certain occupied territories in Ukraine, such as Luhansk, Zaporizhzhia, and Kherson. Additionally, three southeastern regions of Siberia will impose seasonal mining bans during the winter months, which see the highest electricity consumption.

The regions affected by these restrictions are home to many of Russia’s largest cryptocurrency mining operations, which benefit from low electricity rates and easy access to power grids. According to the Russian Ministry of Energy, cryptocurrency miners in Russia consume around 16 billion kilowatt-hours (kWh) annually, which accounts for about 1.5% of the country’s total electricity usage.

Russia’s cryptocurrency mining industry has grown significantly in recent years, driven partly by the surge in Bitcoin prices and the global shift in mining activity following China’s 2021 ban on cryptocurrency mining. However, the country’s power grid is now under significant strain as the military and industrial sectors ramp up electricity consumption due to the ongoing conflict and increased war-related expenditures. This has raised concerns among Russian officials, including President Vladimir Putin, who have repeatedly warned about the unchecked growth of energy demands from cryptocurrency mining operations.

According to Russia’s power system operator, the country’s electricity consumption grew by 1.4% last year, with projections showing a steady increase of 2.4% annually from 2025 to 2027. In light of these projections, Sergey Melikov, the head of the Dagestan region, has requested that the federal government ban cryptocurrency mining in his area due to severe power shortages. He emphasized that electricity consumption in Dagestan has risen by 26% over the past three years, leading to frequent power outages and putting additional pressure on the region’s power infrastructure.