Russia will ban cryptocurrency mining at data processing centers if they use subsidized electricity.
The new law requires data centers to register with the Ministry of Digital Development and not to mine cryptocurrency to enjoy preferential electricity prices, in order to avoid the exploitation of subsidized electricity.
MAIN CONTENT
The law requires data centers to register and commit not to mine cryptocurrency in order to enjoy preferential electricity prices.
The Russian government wants to prevent cryptocurrency miners from exploiting subsidized electricity.
Participation in registration is voluntary, but after registration, it is prohibited to set up mining equipment even if it is not connected to the Internet.
How does Russia regulate cryptocurrency mining at data centers?
According to the official report, Russia bans data centers from mining cryptocurrency if they use subsidized electricity, in order to protect the preferential electricity supply for legitimate purposes, as mandated by the Ministry of Digital Development.
The new law is drafted with the aim of limiting the exploitation of subsidized electricity by cryptocurrency miners, ensuring that subsidized electricity is reserved only for officially registered data processing centers serving communication purposes. This is a step towards maintaining fairness in the allocation of Russia's special electricity resources, implemented by state-owned energy companies.
These measures will contribute to improving electricity efficiency and minimizing risks to the national electricity grid.
— Mr. Igor Shchyogolev, CEO of Russian Energy Company, July 2023
What are the conditions for data centers to enjoy preferential electricity prices?
The law stipulates that all data processing centers must register in the registry managed by the Ministry of Digital Development and Communications, and commit not to use cryptocurrency mining equipment to enjoy subsidized electricity pricing.
Registration is voluntary, but after participating, centers are not allowed to set up cryptocurrency mining equipment even if that equipment is not connected to the Internet. This action aims to prevent miners from taking advantage of subsidized electricity under the guise of communication data centers, in line with the desire to control and limit the increasing cryptocurrency mining activities in industrial areas.
Why is the Russian government focusing on controlling electricity prices for cryptocurrency miners?
The Russian government is concerned that miners using subsidized electricity will put pressure on the national electricity system and create unfairness for other economic sectors, especially in the context of rising electricity costs and increasing consumption demand.
According to the 2023 report, the cryptocurrency mining industry consumes a large amount of electricity, meanwhile, public energy companies in Russia also reflect the situation of subsidized electricity abuse, calling for market pricing for cryptocurrency mining businesses to reduce negative impacts on the electricity distribution system.
Ensuring a sustainable and fair electricity supply is a top priority at this time, and adjusting electricity prices for cryptocurrency miners is very necessary.
— Maria Voronova, Energy Expert, 2023
How could the ban on cryptocurrency mining in data centers affect?
This action helps increase transparency in managing subsidized electricity and limits the misuse of electricity for improper purposes, while promoting cryptocurrency mining activities that comply with regulations, minimizing risks to the electricity system and the national communication network.
In the long term, the regulation may promote centralized data centers to develop processing, data storage, and communication services instead of serving unrecognized cryptocurrency mining activities.
Details on the registration and monitoring of data centers
According to the bill, the Ministry of Digital Development and Communications will manage the registry of domestic data centers, requiring facilities to clearly demonstrate the function of not mining cryptocurrencies to enjoy specific electricity pricing policies.
The registration process includes verifying infrastructure, committing to operate without mining coins, and being subject to strict supervision by regulatory authorities to ensure compliance with regulations to minimize the risk of abusing subsidized electricity for cryptocurrency mining purposes.
Comparing the impact between cryptocurrency mining data centers and traditional data centers
Criteria Cryptocurrency Mining Data Center Traditional Data Center Electricity Consumption Very high, uses many specialized devices for mining Standard, focused on processing, storing data Legality of enjoying preferential electricity prices Limited or banned Eligible if registered and not mining coins Impact on the electricity system Puts great pressure, risk of overload Stable, controlled within permitted limits Commitments and management Difficult to control, requires strict supervision Clear, protected by the Ministry's policies
Frequently Asked Questions
What are Russia's new regulations on cryptocurrency mining? The law prohibits cryptocurrency mining in data centers using subsidized electricity and requires registration with the Ministry of Digital Development. What must data centers do to enjoy subsidized electricity? They must register in the registry managed by the Ministry and commit not to set up cryptocurrency mining equipment. Why is Russia restricting cryptocurrency mining with subsidized electricity? To prevent the abuse of subsidized electricity and protect a sustainable electricity system, ensuring fair distribution of energy. Is registration for data centers mandatory? It is not mandatory but is a condition to enjoy preferential electricity prices and must comply with the commitment not to mine coins. How is the implementation of this regulation monitored? The Ministry of Digital Development supervises, verifies, and processes related violations to ensure compliance with the law.
Source: https://tintucbitcoin.com/nga-cam-dien-gia-re-cho-dao-tien/
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