Iran bans cryptocurrency mining for four months to avoid Power Outages
Iran Facing unprecedented power Outages in major cities, and the government plans to ban Bitcoin & other Cryptocurrency Mining.
Iran has moved to impose a four-month ban on the mining of cryptocurrencies like Bitcoin. The ban, which has come into effect immediately, will last until Sept. 22, said an official announcement.
President Hassan Rouhani said on Wednesday that illegal bitcoin mining consumes up to 2,000MW of electricity compared to 300MW used by legal bitcoin operations.
Iran’s state-run electricity firm Tavanir said the country only has 50 licensed bitcoin farming plants, with 85% of mining being carried out illegally, which consumes 95MW of subsidized energy per hour. The ban on all legal and illegal mining farms comes amid a surge in electricity demand in recent weeks, with unannounced power outages across multiple cities affecting businesses and medical services.
Iran now accounts for 4.5% of the world’s bitcoin mining, as operators are attracted by cheap power and vast natural gas reserves. Gold Prices witness a steep steep decline in the domestic market.
The electricity required for bitcoin mining operations consumes around 10 million barrels of crude oil a year, which equals 4% of total Iranian oil exports in 2020, according to Elliptic.
In January this year, a major cryptocurrency mining plant jointly operated by an Iranian-Chinese was shut down in the southeastern province of Kerman. It came after a viral video showed thousands of bitcoin machines operating at the facility in Rafsanjan city of Kerman, using 175MW of electricity from the total 600 MW allotted to all cryptocurrency factories in the country.
The crypto-asset mining was recognized in Iran for the first time in 2019, after which a licensing regime was established to identify legal miners who paid for the electricity and sold their mined bitcoins to Iran’s central bank. Thousands of illegal mining farms have been shut down in the past two years.