The ban on cryptocurrency mining will come into effect in Moscow, the Moscow region, and several municipalities of the Kursk region starting August 15 and will last until the end of 2032. The restrictions are being introduced due to the high load mining puts on the power grid; the specific dates are set by a government decree.
What Is Mining and Who Are Miners
Cryptocurrency mining is the extraction of digital currencies using computing equipment. Devices perform calculations, support the operation of the network, and receive rewards in cryptocurrency.
Miners are market participants who operate such equipment, pay for electricity, and are responsible for the operation of mining farms. Due to high energy consumption, this activity is increasingly subject to regulation.
Where Digital Currency Mining Will Be Restricted
The Government of the Russian Federation has approved a decree temporarily restricting cryptocurrency mining in a number of territories. The ban covers Moscow, the Moscow region, and part of the Kursk region.
The geography of the restrictions is as follows:
- Moscow — the entire city.
- Moscow region — the entire region.
- Kursk region — Belovsky, Bolshesoldatsky, Glushkovsky, Korenevsky, Lgovsky, Rylsky, Sudzhansky, and Khomutovsky municipal districts; the city of Lgov is also specifically mentioned.
Cryptocurrency remains the subject of active regulation, as mining is associated with a high load on the power grid. In such conditions, not only the rules for admitting market participants are important for the state, but also the norm of energy consumption, especially in regions where electricity consumption is a sensitive issue.
What Is Happening With Cryptocurrency Market Regulation
A few days earlier, the Bank of Russia prepared the first drafts of regulatory acts necessary to launch an organized cryptocurrency market in the country. These concern the rules for trading digital currencies and digital rights.
According to the regulator’s plan, the trading procedure should be fixed in the exchange’s rules. The exchange will also calculate the market and weighted average price of such instruments.
Several areas are important in the regulation of digital assets:
- Federal Tax Service of Russia — tax administration.
- Ministry of Energy of the Russian Federation — energy balance issues.
- Taxes for market participants — one of the key elements of legal operation.
For miners, the new rules mean a more formal entry into the market: activities must comply with territorial restrictions, accounting, tax, and energy consumption requirements. For the cryptocurrency market, this increases predictability, but at the same time makes operations more expensive and complicated for those who previously relied only on cheap electricity.
Who Will Be Able to Work Legally
Legal work for miners will depend on compliance with admission rules, tax accounting, and energy consumption restrictions. If activities are carried out in a region where the ban is in effect, mining in the previous format is not allowed.
The state’s interest in legalizing cryptocurrencies is related to the need to bring the market out of the gray zone: to account for taxes, control the load on networks, and set clear rules for trading digital assets.
The status of a market participant is also important for businesses. For example, an individual entrepreneur in Russia faces separate accounting and reporting requirements if their activities fall under regulated areas.
Context for Mining in the Regions
Mining has repeatedly come under the scrutiny of law enforcement and regulators. Previously, police discovered a disguised mining farm in the forest near Irkutsk. The Irkutsk region is often mentioned in connection with digital currency mining due to miners’ interest in affordable electricity.
The topic of digital asset regulation remains part of a broader government agenda. Such decisions can reduce the load on the power grid in certain areas and at the same time push miners to operate in a more formal legal field.
President of Russia Vladimir Putin has previously signed laws related to the regulation of digital financial assets, so the new restrictions are seen as a continuation of the course toward clearer rules for the market.
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