What happened?
Russia is set to ban domestic data centers from mining cryptocurrency if they use subsidized power. The government is revising a draft law on crypto mining, initially proposed in 2022, to refine its regulations. This law mandates that data centers pledge not to mine crypto if they want to qualify for subsidized power rates.
Who does this affect?
This decision affects Russian data processing centers, crypto miners, and the broader industrial and commercial sectors benefiting from subsidized power. It particularly impacts those managing dual-use facilities that support both mining and traditional IT operations. Crypto miners, especially those relying on cheaper energy, will face additional operational challenges unless they opt out of subsidized power programs.
Why does this matter?
The ban could significantly impact the crypto market by increasing operating costs for Russian miners, potentially reducing overall mining output. This move might shift the competitive landscape as major mining operations re-evaluate their strategies to maintain profitability. Additionally, it could drive innovation in energy sourcing or push smaller miners to cease operations, altering the dynamics of crypto supply and demand.