May 27, 2021
Iran recently announced a four-month ban on cryptocurrency production after unplanned power cuts in major cities.
With an estimated 4.5% of all bitcoin mining taking place in Iran, Iranian President Hassan Rouhani told a cabinet meeting that, while the main cause of the blackouts was a drought affecting hydroelectric power generation, cryptocurrency mining, 85% of which are unlicensed, was withdrawing more than 2 GW from the power grid every day.
The Iranian authorities officially recognized cryptocurrency mining in 2019 and later introduced a cryptocurrency licensing system that ensures that the required miners identify themselves, pay a higher tariff for electricity, and sell their mined bitcoins to the Central Bank of Iran.
But, President Rouhani said that unlicensed facilities consumed between six and seven times more electricity, leading to a ban on all cryptocurrency activities until 22 September.
Bitcoin mining has helped Iran evade sanctions and earn hundreds of millions of dollars in crypto-assets after the country’s banks were cut off from the global financial system and oil exports were hampered by sanctions.
For more information, read the original story in the BBC.
