Proposed Russian Crypto Ban May Push Miners West

If Russia follows through with proposed plans to ban cryptocurrency mining, miners may be forced West

article-image

Bank of Russia; Source: Shutterstock

share

key takeaways

  • Russia’s central bank is calling for a ban on several cryptocurrency operations, including mining
  • The report comes months after the energy ministry threatened to impose tariffs on miners for energy usage

Cryptocurrency miners may be forced out of Russia if the country’s central bank gets its way. 

The government entity called for a ban in a report published Thursday, citing concerns that digital assets could undermine financial stability. 

The move could strike a major blow against the world’s third-largest mining hub, according to data from the University of Cambridge — rising in the ranks after China banned the practice in June 2021.

“I don’t have a confident view on whether Russia will undertake a China-style mining crackdown,” said Nic Carter, partner at crypto venture capital firm Castle Island Ventures. “But if they do, it will definitely affect Russian miners — many of whom are using natural gas and coal.” 

The report is only the latest step Russia has taken in recent months to enforce tighter regulations on digital assets.

Following China’s ban, Russia’s energy ministry said it would consider tariffs on miners. The ministry estimated that energy usage increased 158% year-over-year in the Irkutsk region due to an increase in mining operations, according to a report at the time.

Amid the Russian concerns, Kazakhstan, the second-largest mining territory, is currently grappling with increasing unrest and ensuring internet outages, leaving some experts to wonder where miners will go now. Prior to Thursday’s report, Carter speculated that miners in Kazakhstan might be headed for Russia. Now he’s not so sure. 

“Ultimately, it looks like the only ‘safe’ place to mine is the US or Canada, and even then on a state-by-state or province-by-province basis,” he said. 

Though China’s ban triggered a sharp selloff, markets were unphases by the Russia news, with Bitcoin trading 2.4% higher over the last 24 hours as of publication. 

“Russia only hosts a little more than 10% of Bitcoin’s current mining power,” said Anto Paroian, chief operating officer at crypto investment firm ARK36. “When and if the ban is finally enforced — which could still take some time — Russian miners may be forced to move their operations elsewhere but any effect of this development on bitcoin’s price will be extremely short-lived.” 


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

recent research

Flashnote Template (3).png

Research

MetaDAO offers a platform for DAOs to engage in futarchy, using conditional markets and profit incentives for improved decision-making. Conditional markets allow market participants to speculate on whether or not the passage of a proposal will increase a token’s market value. By crowdsourcing information from market actors, DAOs can utilize futarchy to identify decisions that will be most beneficial for their token’s market price. MetaDAO as an organization is explicitly engaged in decision-making on the criteria that market participants believe a decision will be accretive to the price of the META token.

article-image

Meanwhile, Euler returns with a V2 launch of its lending protocol

article-image

Two bitcoin mining-focused companies introduce new leaders to their director boards as they prep for the segment’s evolution

article-image

A fund co-founded by Alan Howard’s son and 10T veterans launched alongside a generalist fund with Notation Capital co-founder Nick Chirls as a general partner

article-image

Making sense of the jobs report that didn’t necessarily clear up what size of rate cut the Fed could opt for

article-image

Plus, India really showed out for Colosseum’s Radar hackathon

article-image

The offering, which launched in October 2023, had gathered just $21 million in assets