30s Summary

The Russian government is considering placing restrictions on cryptocurrency mining in 13 regions due to concerns over maintaining consistent electricity supply. The proposed constraints, which could last until 2031, were discussed in a meeting led by Deputy Prime Minister Alexander Novak. They would target regions known for large-scale mining, including Irkutsk, and several areas in Ukraine under Russian control. If implemented, the measures could potentially disrupt Russia’s crypto mining operations, which heavily rely on regions such as Irkutsk due to its availability of cheap and renewable hydroelectric power.

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Russia’s government is thinking about putting limits on cryptocurrency mining in 13 areas, after passing some laws that target the crypto industry. There was a meeting held by the Deputy Prime Minister of Russia, Alexander Novak, on November 19th. The hot topic of the day was about what’s going on with the electrical power industry.

People at the meeting suggested we should cut back on mining activities in areas where it’s hard to keep the power supply constant. They want to avoid running out of power during times where everyone’s using a ton of energy. Right now, the government has plans to put in these limits in places where a lot of crypto mining happens. This includes the Irkutsk region in Russia, and some areas in Ukraine that Russia controls, like Donetsk, Luhansk, Zaporizhzhia and Kherson.

These proposed limitations aren’t just a passing thing, they’re expected to last until 2031. Besides Irkutsk, limits could be placed in various other areas, including Republic of Buryatia, Zabaikalsky Krai and several key regions in Siberia. Further, the same kind of limits are being suggested for the territories of Republic of Dagestan, Republic of North Ossetia-Alania, Republic of Ingushetia, Chechen Republic, Kabardino-Balkarian Republic, and the Karachay-Cherkess Republic, until 2031.

Why is this a big deal? Well, if these limits are put into action, it could really throw a wrench in Russia’s crypto mining plans. Many local businesses that bank heavily on cryptocurrency mining, like BitRiver, depend on cheap electricity from regions like Irkutsk. The Irkutsk region is known for having the first and largest data center by BitRiver. This was kicked off in 2019 in the city of Bratsk.

Why is Irkutsk a hotspot for crypto mining? A lot of things make it a good spot.The place has a lot of renewable hydroelectric energy, really low electricity rates, and a cold climate. Just to give you an idea, there’s this hydroelectric power station in Bratsk that has an electric power supply of 4,500 megawatts. And it’s one of the biggest producers of hydroelectricity in Russia.

In the past couple of months, Russia’s president, Vladimir Putin, signed some laws related to crypto mining. Even though these laws have made the rules clearer for crypto mining, some people in the industry aren’t happy. They say there’s a lot that’s still unclear in terms of the rules. Apart from this, the new laws bring in a lot of limitations. For instance, people from other countries can’t mine in Russia. And the government has the option to stop mining in areas where power supplies are iffy.