Russia to Block Data Processing Centers from Mining Crypto with Cheap Power

The Russian government is poised to ban domestic data processing centers from  mining crypto  if they use subsidized power.

The Russian media outlet  RBC  reported that the government has revamped a draft law on mining that passed a first reading in the State Duma back in 2022.

Government officials are now working with lawmakers on a bid to refine the bill ahead of a second reading.

Inside a Russian data processing center. (Source: @regruvideo/YouTube/Screenshot)

Mining Crypto Soon to Be Off-limits in Many Russian Data Centers

The bill proposes asking data processing centers to sign up to a registry curated by the Ministry of Digital Development and Communications.

This process will involve operators pledging not to mine crypto at their centers. Only operators who make these pledges will be allowed to receive electricity at preferential rates.

The bill’s architects say its goal is to prevent miners from being able to claim benefits when paying for electricity.

These benefits will only be provided only to data centers that have been formally recognized as “communication facilities.”

Russian electricity firms provide subsidized power to residential users, as well as industrial sector and commercial firms.

But in recent months, lawmakers have called for power companies to roll out special unsubsidized rates for crypto mining companies.

Membership of the registry will be entirely voluntary, the bill’s authors added. However, all firms that join the registry will be barred from even housing crypto mining rigs, even if these are not connected to the internet.

Industrial Miners Say They’re Ready to Comply

Russian crypto mining experts said the bill has not taken them by surprise. RBC quoted the Intelion Director-General Artem Shchepinov as stating that he anticipated the measure.

Shchepinov added that it would help solidify Russia’s technological sovereignty and strengthening regulated its digital infrastructure.

Others, however, complained that Moscow has not asked the private sector for input before formulating the bill.

A blockchain expert was quoted as saying that the new law could have a detrimental impact on both the industrial crypto mining industry and the conventional data center industry.

But a data center operator claimed the move would do little to dent the capabilities of major industrial miners.

These centers are “self-sufficient and sustainable,” he said, and “do not require government support.”

Engineers work on a new 48 MW Intelion data center in the Russian Republic of Khakassia. (Source: @intelionmining/VK/Screenshot)

Dual-use Facilities

However, many major industrial miners operate dual-use centers. These facilities can house both mining and more conventional IT resources.

Shchepinov appeared to suggest that his company has already begun preparing for the change. He gave the example of Intelion’s facilities in the Samara Oblast.

The executive explained that Intelion has already divided this facility into “two clusters that provide crypto mining and AI computing in parallel.”

In May, industry figures revealed that Intelion and BitRiver’s  combined revenues for the financial year 2024 hit the $200 million mark .

Around 90% of Russian industrial miners focus their efforts on  Bitcoin  (BTC), most experts in the nation agree.

However, a significant number of home-based miners in the nation prefer to miner  Ethereum (ETH) , crypto enthusiasts have told Cryptonews.com.