Russia Implements Strict Crypto Mining Regulations to Manage Energy Use

Russia has implemented stringent regulations on cryptocurrency mining, reflecting a significant policy shift aimed at managing the sector's rapid growth and ensuring energy stability. The new measures, announced by the Russian government, include three key components designed to control and monitor cryptocurrency mining activities across the country.

Firstly, authorities have the power to remotely disconnect mining equipment during periods of high electrical demand. This action prioritizes the supply of electricity to essential services such as homes, hospitals, and critical industries. Miners are classified as "fourth category" consumers, the lowest priority level in the national power grid, ensuring that their energy consumption does not disrupt essential services.

Secondly, legal sanctions have been reinforced to deter illegal mining activities. Those who make unauthorized connections to the grid or operate in prohibited areas will face fines and criminal liability. Twelve regions, including Siberia and the North Caucasus, have active bans on mining due to energy deficits. These restrictions can last up to six years in some areas. Additionally, a state registry of mining equipment will be established, requiring labeling and certification for all imported hardware. This registry will help identify who uses electricity for mining and allow for remote outages when necessary, reallocating energy to priority consumers and reducing state losses from illegal mining.

The current context justifies these actions. Russia legalized mining in 2024, but the rapid growth of the sector depleted regional electricity surpluses. President Vladimir Putin noted at an economic forum, “We had surpluses in some regions, but the miners used them up. We made necessary decisions.” Official data show that only 30% of mining companies have registered. Police operations have dismantled hundreds of illegal farms this year, highlighting the need for stricter controls.

There are limited exceptions to these regulations. Miners consuming less than 6,000 kWh per month do not need to register. Final regulations will be submitted by September 2025, with implementation beginning in regions with existing bans. The Ministry of Energy explained that the registry will help manage the growth of the sector after its legalization, ensuring that the use of cryptocurrencies remains controlled and strategic.

These measures are part of a broader strategy to reduce reliance on the U.S. dollar and Western banking networks, which have been heavily impacted by economic sanctions imposed on Russia since 2022. The new regulations aim to establish a state-backed crypto exchange that will cater to accredited investors, institutional players, and exporters managing cross-border settlements. This exchange will operate under strict legal guidelines, including transaction tracking, proof-of-identity, and state monitoring, ensuring that the use of cryptocurrencies remains controlled and strategic.

The Russian central bank, which previously opposed cryptocurrencies, has recently shown leniency in allowing their use in cross-border trade. A law enacted in 2023 permits businesses to exchange contracts in digital currencies when engaging in international trade. This policy change aims to evade Western sanctions, particularly those affecting the use of SWIFT and correspondent banking services. The central bank’s evolving approach includes support for pilot programs like the digital ruble and tokenized assets, while maintaining strict control over domestic crypto circulation. This “sandbox model” allows for innovation under heavy oversight, making custodial services by trusted state banks particularly valuable.

Sberbank, Russia’s largest bank, has announced its intention to offer custody services for digital assets, positioning the bank as a key player in Russia’s digital asset ecosystem. This move complements ongoing efforts to establish a state-backed crypto exchange. The bank’s proposal includes safeguards such as asset freeze in cases of suspected illegal activity, aligning with conventional banking compliance frameworks. Sberbank’s plan is currently in the regulatory discussion stage and could be implemented within months.

Sberbank’s entry into the crypto custody market is not an isolated move. The bank has been exploring blockchain technology since 2020, launching its own decentralized finance (DeFi) platform and announcing plans to tokenize a range of financial assets. Earlier this year, Sberbank generated headlines with the announcement of a Bitcoin-linked bond, which is traded over the counter and may be listed on local exchanges in the near future. This indicates the bank’s willingness to integrate crypto throughout the broader financial system. In addition to custody, Sberbank is considering staking services, token offerings, and on-chain settlements, potentially offering Russian institutions a full suite of compliant digital finance tools without relying on international providers.

Russia’s strategic use of cryptocurrencies as a tool for trade resilience is evident in the increasing adoption of tokenized assets, stablecoins, and top cryptocurrencies like Bitcoin and Ethereum for international settlements. This shift allows sanctioned entities to conduct trade without intermediaries controlled by Western powers, bypassing dollar-clearing networks and enabling peer-to-peer international settlements. Sberbank’s move into crypto custody is part of this broader strategy, providing the necessary infrastructure for institutional traders and exporters to securely store and manage their digital assets.

The Bank of Russia introduced legislation in 2025 that would allow the exchange of crypto for “qualified traders” and limit it for the rest of the Russians. This move is part of a broader effort to control the use of cryptocurrencies within the country, ensuring that only accredited and institutional players can participate in the digital asset market. The legislation aims to prevent the misuse of cryptocurrencies for illegal activities and to maintain the stability of the financial system.

Russia's RUBX stablecoin move is all about sidestepping U.S. dominance. The introduction of the RUBX stablecoin is a strategic move to reduce reliance on U.S. regulatory control and to establish a more independent financial system. The stablecoin will be used for cross-border settlements and will operate under strict legal guidelines, ensuring that its use remains controlled and strategic. This move is part of a broader effort to establish a state-backed crypto exchange and to integrate cryptocurrencies into the broader financial system.