• Sat. Mar 2nd, 2024

Russia Proposes Ban On Crypto Mining In Residential Areas

Jan 30, 2023

A suggestion has been put forward by advisers to the Kremlin about banning home crypto mining in Russia, or at least in some of its regions.

The motive behind the said proposal is to ensure that fires do not erupt in residential buildings. The grid is under high load because of electricity consumption by amateur miners, which leads to blackouts and breakdowns.

A ban

The State Council’s Energy Committee is an advisory body to the president of Russia and it has recommended that a ban should be imposed in residential areas on all crypto mining activities.

Local media reported that members of the committee believe this measure would be helpful in reducing fire hazards.

The recommendation states that crypto mining should be prohibited in houses and apartment blocks across the country, or at least in those Russian regions that are facing energy deficits.

These regions include Moscow as well as the region adjacent to the country’s capital, Moscow Oblast. Many ordinary Russians are engaged in crypto mining for generating additional income.

This is particularly true for regions where electricity rates are low. But, it should be noted that crypto mining is not regulated in Russia as yet.

A bill designed to regulate crypto mining is currently being reviewed in the lower house of the Russian parliament known as the State Duma.

More suggestions

The energy experts further stated that regional authorities should also be granted powers by the federal government for imposing additional taxes on crypto mining activities.

These details were disclosed in the minutes of a committee meeting that had been conducted in mid-December.

One of the members of a committee of the State Duma related to communications, information technology, and policy, Anton Tkachev believes that it is logical to ban crypto mining in residential areas.

He added that doing so in regions that are energy deficient is a good move because massive amounts of energy are consumed by industrial crypto mining farms.

Energy security

He went on to say that energy security has become a vital issue, particularly for small towns that do not have enough budgets for funding the repair and maintenance that is required for facilities and energy systems.

The lawmaker further said that where private homes are concerned, there is a possibility that mining equipment could also lead to fires.

The Ministry of Energy in Russia is in favor of regulating crypto mining, but it has stated that coin minting methods consume a high amount of energy.

Therefore, these activities are unsuitable for residential areas because the distribution networks are not designed for handling the overloads, something that energy companies have already warned about.

The hotbed for home crypto mining in Russia is the Irkutsk Oblast region, as it has the cheapest electricity rates in the country and residents have taken advantage of this.

The rates have been subsidized for the benefit of the population, but people have opted to set up crypto farms in garages and basements.

Media reports have indicated that 23 fires that broke out in the region had mining equipment in the first six months of 2022.

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