• 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.” 

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  • Blockworks
    Senior Reporter
    Casey Wagner is a New York-based business journalist covering regulation, legislation, digital asset investment firms, market structure, central banks and governments, and CBDCs. Prior to joining Blockworks, she reported on markets at Bloomberg News. She graduated from the University of Virginia with a degree in Media Studies. Contact Casey via email at [email protected]