Why the world’s second-largest Bitcoin mining power is shutting down rigs in its capital city
Russia has implemented a year-round ban on cryptocurrency mining in several regions to prevent power shortages caused by energy-intensive mining facilities. This move is part of a broader regulatory effort to manage domestic energy demand while navigating the impact of Western sanctions.
Why it matters
The restriction reflects the tension between the energy demands of the crypto industry and national infrastructure stability in a sanctioned economy.
The measure, established under government decree No. 936, also prohibits participation in crypto mining pools. The decree was signed on July 25 and published on July 31, local media reports.
Russia as a whole accounted for an estimated 175 exahashes per second, or 16.4% of Bitcoin’s global computing power, in the first quarter, according to Luxor’s Hashrate Index . That placed it second behind the U.S., although it’s unclear what capacity was located in the newly restricted region.
The country’s Energy Ministry said a year-round restriction was needed to reduce the risk of power-capacity shortages as energy-intensive mining facilities connect to regional grids. Mining currently consumes roughly 1 gigawatt in the Moscow power system, while the region’s data-center capacity could reach 3.6 GW, or 17% of peak demand, by 2032, Interfax reported after the decree was first signed.
Mining is also linked to the country’s Western sanctions.
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