Iran has recently announced a ban on the mining of cryptocurrency for as long as four months following country-wide power outages. The intensive industry is said to have contributed to blackouts for households and businesses across Iran, with outages lasting as long as six hours a day in recent weeks. Such blackouts even caused Iranian chess professionals to lose their match during an Asian championship hosted online.
President Hassan Rouhani stated on Wednesday:
Hassan Rouhani Source: Twitter
Everyone is finding a corner to mine bitcoins and cryptocurrencies. Whoever does this from today is doing an illegal job even those who were allowed [to mine bitcoins] are no longer allowed until we leave behind this problem [of power cuts.
On Wednesday, Rouhani put an official order out to ministries of telecommunication, industries, interior affairs and energy to begin the process of clamping down on cryptocurrencies. He expressed concern for the fact that consumption of electricity had risen by around 20 per cent over the past year alone. Though Rouhani could not detail just how much of the consumption rise has been caused by cryptocurrencies, this is the second attempt Iran has made to target digital currencies.
The cryptocurrency mining industry has become prominent in Iran partially due to the presence of highly subsidised electricity within an extremely power-reliant trade. With such subsidies in place, imports can then theoretically be paid for using bitcoin. However, the US has implemented sanctions that bar all banking transactions between themselves and Iran, and with blockchain technology in place to monitor all transaction details, it is challenging for traders in Iran to utilise cryptocurrency in an attempt to evade sanctions.
According to recent data taken from the crypto compliance solutions and blockchain analytics provider, Elliptic, Iran participates in 4.5% of the overall Bitcoin mining industry around the entire globe. Within the latest announcements regarding the recent ban, it has also been reported that around 85% of cryptocurrency mining farms in Iran are operating without a license. With this in mind, Iranian authorities are now working hard to increase their thorough monitoring of unlawful mining operations in and around the region.
Of Iran’s 50 licensed mining centres, which are situated across 14 of the country’s 31 provinces, 209 megawatts of energy is consumed on a combined basis.
Following Bitcoin’s recent 50% slump after China’s crackdown on crypto trading and Elon Musk’s last week critique on Bitcoin energy consumption and reversing his position on Tesla accepting Bitcoin as payment, Europe’s largest bank HSBC confirmed this week it is not planning to launch crypto trading.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
