Key Takeaways
- The Middle Eastern country has taken a stand against licenced crypto miners, announcing that all 118 legal ones will be shut down in the next two days.
- Authorities in the country have already taken similar measures in the past, citing increased electricity demand during the summer.
- Iran’s power industry spokesman, Mostafa Rajabi Mashhadi, said the country will stop supplying electricity to all 118 licenced mining companies on June 22.
Iran’s co-relation with the crypto mining industry screams mixed signals and is a perfect example of a love-hate situation.
Iranian authorities have declared that crypto-miners working in the country will lose power by June 22. The government has planned, according to the Tehran Times, to guarantee that citizens have plenty of electricity. A spokesman for the Iranian Energy Ministry, Mostafa Rajabi Mashhadi, stated that the Asian country expects a higher rate of energy consumption beginning next week.
Countries have long considered and used Bitcoin as a means of bypassing trade restrictions. The United States has imposed broad sanctions on Iran, potentially preventing it from attempting to access the world economy.
According to Mostafa Rajabi, the country’s consumption reached a new high of 62,500 megawatts during the high season last week (MW). This figure is expected to rise to 63,000 MW by next week. The authority has been forced to take action in order to prevent a blackout.
Iran recognised the cryptocurrency mining industry in 2019 and began issuing licences to miners, who must pay higher electricity rates and sell their mined bitcoins to Iran’s central bank.
According to University of Cambridge research, Iran is a significant player in the bitcoin mining market, contributing nearly 4% of global bitcoin hashpower in 2020.
As shown in the Tehran Times report , the government has granted over 1,000 crypto-mining permits to various companies since crypto-mining was legalised as an economic activity in Iran. In addition to licenced operations, the country has a large count of non – licensed crypto-miners straining the National power network. The government is attempting to clamp down on these operators at various times without much progress. Last year, when electricity demand was at an all-time high, the government ordered two closings to relieve pressure on its power infrastructure.
Other countries’ miners have taken a stand against regulators. Between July and August of last year, China’s crypto hash rate, which quantifies the computational power used by proof-of-work cryptocurrencies like Bitcoin, dropped to zero, following the country’s strictest crackdown on crypto mining.
Iranian authorities have closed down 6,914 crypto farms that were functioning without a valid licence in the last two years. Local authorities have been cracking down on illegal crypto-mining operations since 2020, when the national power grid’s management started to chastise crypto-mining for interrupting Iran’s electricity supply.
These crypto-farms ingested over 645 megawatts of electricity while functioning without a licence, according to an Iranian news outlet. Before the bans, cryptocurrency mining was thriving in Iran. Elliptic, a blockchain analytics firm, estimated in May of last year that the country accounted for 4.5 percent of all Bitcoin mining.
