Why the world’s second-largest Bitcoin mining power is shutting down rigs in its capital city
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Summary
The Russian government has banned crypto mining and participation in mining pools in Moscow, the Moscow Region, and parts of Kursk until December 31, 2032. This was enacted through government decree No. 936, signed on July 25 and published on July 31, to help preserve the stability of the power grid. The Energy Ministry implemented the year-round restriction to address power-capacity shortages caused by energy-intensive mining operations straining regional electricity grids.
Why it matters
The ban aims to reduce the risk of power shortages in major Russian regions by limiting the electricity consumption of crypto mining, which currently consumes about 1 gigawatt in the Moscow power system. The Moscow region’s data-center capacity could reach 3.6 gigawatts, representing 17% of peak electricity demand by 2032, showing the potential impact of mining on power infrastructure. This move reflects the government’s balancing of energy needs against the rapid growth of crypto mining.
Key context
Russia legalized registered crypto mining in 2024 but banned the activity in 10 other regions through March 2031 due to rising electricity demand. Restrictions had already been extended to parts of southern Irkutsk, Buryatia, and Zabaykalsky Krai. The country is the world’s second-largest Bitcoin mining power, accounting for an estimated 16.4% of global Bitcoin computing power in early 2024. Mining in Russia is also connected to geopolitical factors, as Crypto mined BTC has been used in international payments to circumvent Western sanctions. The U.S. Treasury sanctioned Russian mining-related entities like BitRiver in 2022.
Key numbers and entities
The decree restricting mining is government decree No. 936. Russia’s Bitcoin mining capacity was estimated at 175 exahashes per second or 16.4% of the global total in Q1 2024. Moscow’s mining consumes roughly 1 gigawatt, with potential data-center demand of 3.6 GW by 2032. Key figures mentioned include Russia’s Finance Minister Anton Siluanov and organizations like BitRiver, which was sanctioned by the U.S. Treasury in 2022.
What remains unclear
The exact proportion of Russian mining capacity located specifically in the restricted Moscow and Kursk regions is not specified. The source does not provide detailed information on enforcement mechanisms or the impact on individual miners in the affected areas. There are no additional details about how the ban on mining pool participation will be implemented or monitored.