New Decree Bans Mining in Moscow, Moscow Region and Kursk

On July 25, 2024, the Russian government signed Decree No. 936, which was published in the official gazette on July 31. The decree prohibits the operation of any cryptocurrency‑mining rigs, as well as participation in mining pools, in the city of Moscow, the surrounding Moscow Region, and selected areas of Kursk for the next eight years. The ban is set to expire on December 31, 2032.

The order represents a decisive step in Russia’s effort to manage the energy demands of its rapidly growing crypto sector and to mitigate potential strain on regional power grids.

Russia’s Share of the Global Bitcoin Hash Rate

According to Luxor’s Hashrate Index, Russia accounted for an estimated 175 exahashes per second (EH/s) in the first quarter of 2024. This figure translates to roughly 16.4 % of Bitcoin’s worldwide computing power, placing the country second only to the United States. It remains unclear how much of this capacity resided in the newly restricted Moscow‑area jurisdictions.

Energy and Grid Considerations

The Ministry of Energy explained that the year‑long restriction is necessary to reduce the risk of power‑capacity shortages. Mining operations in the Moscow power system currently consume about 1 gigawatt (GW) of electricity. Data‑center capacity in the region could expand to 3.6 GW by 2032, which would represent 17 % of the peak demand for the area, according to an Interfax report released after the decree’s signing.

The decree’s focus on grid stability reflects a broader concern that the energy‑intensive nature of mining could jeopardise essential services and infrastructure.

Legal Context and International Sanctions

In December 2024, Finance Minister Anton Siluanov noted that Russian firms had begun using domestically mined Bitcoin for cross‑border payments after a series of legal reforms aimed at circumventing Western sanctions. A parliamentary bill passed in July upheld the ban on domestic crypto payments while carving out exceptions for foreign‑trade settlements and transactions involving mined cryptocurrency. This framework preserves a channel for sanctions‑restricted payment flows.

The United States Treasury had previously sanctioned BitRiver and ten of its subsidiaries in 2022, arguing that Russian mining companies were monetising the country’s energy resources and could help offset the effects of broader sanctions.

Broader Regulatory Landscape

Russia’s regulatory journey has seen a pendulum swing from legalization to restriction. The country first authorised registered crypto mining in 2024, only to impose bans in ten regions that remained in force until March 2031, citing electricity demand constraints. The year‑round restrictions were later expanded to include southern Irkutsk and the majority of Buryatia and Zabaykalsky Krai.

These moves illustrate the government’s attempt to balance the economic benefits of cryptocurrency mining against the national interest in energy security and grid reliability.

Zcash’s Upcoming Tachyon Upgrade

While Russia tightens its domestic mining rules, the cryptocurrency community remains active elsewhere. Zcash announced its Tachyon upgrade, which seeks to scale shielded payments, enhance quantum‑resistance, and evaluate the project’s funding, security, and governance models. The upgrade reflects ongoing efforts by privacy‑oriented coins to address both scalability and long‑term sustainability concerns.

Source: CoinDesk – “Why the world’s second‑largest Bitcoin mining power is shutting down rigs in its capital city”