Given the growing interest in computing power to support digitalization and artificial intelligence, Russia plans to introduce a ban on cryptocurrency mining in data centers.
A bill initiated by President Putin and aimed at improving Russia’s ability to process big data and create artificial intelligence has added provisions banning digital currency mining in such institutions.
Russian authorities are set to ban cryptocurrency mining in data centers. The main goal of the move is to prevent Bitcoin miners from taking advantage of Moscow’s AI capabilities, such as access to cheap electricity.
The corresponding changes were made to the bill concerning the priority development of data processing centers. As reported in the press this week, these amendments were added before the second reading in the State Duma.
The bill introduces new provisions to a number of laws that have already been finalized by legislators, the business news agency RBC reports, citing a representative of the Russian government apparatus and Deputy Prime Minister Dmitry Grigorenko, who is responsible for the regulatory framework.
In the updated legislation, data centers are now defined as communication facilities. They will be included in a special register maintained by the Ministry of Digital Development, Communications and Mass Media of the Russian Federation.
The article details that registered data centers would be prohibited from hosting cryptocurrency mining infrastructure or engaging in mining. The Duma is expected to make a decision on the proposal by the end of this month, a source familiar with the process told the publication.
The official noted that data centers will be offered preferential electricity rates to reduce operating costs, as well as expedited connections to power grids to bypass bureaucratic hurdles — benefits that have been unavailable to cryptocurrency mining companies since Moscow legalized their activities last year.
A government representative explained that digitalization and the development of artificial intelligence (AI) imply the storage and processing of large volumes of data, and to effectively accomplish this task, it is necessary to increase the number and capacity of data processing centers, specifying:
“Transparent and clear regulation is the first step. We will legislate that a data center is a communications facility, not just a server room. Clear rules will create the basis for additional support measures.”
The preferential regime for data centers was established on the instructions of Vladimir Putin, who instructed the government to develop support measures for the industry back in 2020. The bill was submitted to the Duma the following year and adopted in the first reading in 2022.
However, the crypto mining industry, regulated by a law signed by the Russian President in 2024, has faced a very different attitude from both federal and local authorities. Since that decision was made in 2024, the activity has been banned in about a dozen territories, from the Far East to occupied Ukraine.
Speaking at a development forum last week, Putin explained the restrictions on mineral extraction that will be in place for the next six years in some parts of his vast country as a matter of rational use of Russia’s resources. He added, according to the Kremlin press service:
“We recently rejoiced at the surplus of electricity in some regions. But then mining started to happen there, and governors started complaining to me… We had to make certain decisions.”
Cryptocurrency miners, who exploit low, often subsidized electricity rates in regions such as the Irkutsk region and Siberia, have been accused of turning excess power into a shortage. Although some regional government requests for a ban have been rejected by the executive branch in Moscow, citing the risk of reduced tax and energy revenues.
The government’s latest measures to crack down on Russia’s mining industry and address another problem — the lack of computing power — are likely to create new difficulties. For example, the largest data center in the Irkutsk region belongs to mining giant BitRiver.
According to blockchain, energy and digital finance analyst Oleg Ogienko, if the law is adopted in its current form, it will likely harm not only the mining sector, but also the data center industry. In an interview with local news portal IrCity, he noted that a number of data center operators have installed mining equipment, and predicted that the new rules will lead to financial losses for these companies.
Source: cryptonews.net
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