Russian authorities have proposed a bill that would seek to ban data centers from mining Bitcoin if they benefit from subsidized state power.

It would mean any data centers currently benefitting from cut-price electricity rates will be shut down, with the subsidized electricity instead being diverted to AI-related projects.

The concept of prioritizing AI data centers was reportedly first proposed by Vladimir Putin as early as 2020. A bill was presented to the state Duma and passed on first reading in 2022, and is now being prepared for a second reading.

The updated bill redefines data center processors (DPCs) as special communications facilities which will be listed on a special register maintained by the Ministry of Digital Development, Communications and Mass Media of the Russian Federation.

A Russian government representative explained that the huge data demands required by AI-based projects would require enormous storage and processing capabilities, hence the need to requisition the crypto data centers.

“Transparent and understandable regulation is the first step. We will legislatively establish that a data center is a communications facility, not just a server room. Clear rules will create [the] basis for additional support measures,” said the official, as reported in the Russian news outlet, RBC.

Russia has had a storied history with cryptocurrency mining, having set special restrictions on how much mining could take place in certain regions during certain times of the year when load on the state grid is at its highest.

Despite upcoming restrictions, Russia-based tech companies recently agreed a $153 million deal to expand crypto data center sites at the recent annual St. Petersburg International Economic Forum, held between 18 and 21 June.

Other countries, notably Norway, are looking at banning or restricting cryptocurrency mining as demand for power from data centers increases.