Why the world’s second-largest Bitcoin mining power is shutting down rigs in its capital city

Crypto mining was banned in Moscow, the surrounding Moscow Region and parts of Kursk, with the restrictions set to run through Dec. 31, 2032.

The measure, established under government decree No. 936, also prohibits participation in crypto mining pools. The decree was signed on July 25 and published on July 31, local media reports.

Russia as a whole accounted for an estimated 175 exahashes per second, or 16.4% of Bitcoin’s global computing power, in the first quarter, according to Luxor’s Hashrate Index. That placed it second behind the U.S., although it’s unclear what capacity was located in the newly restricted region.

The country’s Energy Ministry said a year-round restriction was needed to reduce the risk of power-capacity shortages as energy-intensive mining facilities connect to regional grids. Mining currently consumes roughly 1 gigawatt in the Moscow power system, while the region’s data-center capacity could reach 3.6 GW, or 17% of peak demand, by 2032, Interfax reported after the decree was first signed.

Mining is also linked to the country’s Western sanctions.

Russian companies had been using domestically mined bitcoin in international payments after legal changes designed to counter Western restrictions, Finance Minister Anton Siluanov said in December 2024.