Iran had prohibited the energy-intensive mining of bitcoin and other Cryptocurrencies for nearly 4 months, President Hassan Rouhani said that the country experienced major power shortages in numerous towns.
The ban on the mining of cryptocurrencies is effective immediately until September 22. Approximately 85 percent of Iran’s current mining is unlicensed “Censured,” Rouhani said during a cabinet meeting in a televised speech.
Bitcoin and other cryptocurrencies are generated through the mining procedure, in which advanced systems compete to solve complex mathematical calculations. The process consumes a lot of energy and frequently relies on electricity produced by fossil energy, which Iran has plenty of.
The ban at first was put in place because of concerns about the stability of the country’s fragile electricity supply. The crypto mining ban has been removed, with Ebrahim Raisi taking office as president on August 3rd, 2021.
Iran is projected to be responsible for 4.5 percent to 7 percent of the world’s bitcoin mining. It may come as no surprise that, thanks to plentiful fossil fuel supplies such as natural gas, Iran has some of the world’s lowest electricity prices.
Iran’s economy has suffered significantly since 2018, after former President Donald Trump pulled Tehran out of the 2015 nuclear deal with six world powers and reinstituted restrictions. The cabinet of US President Joe Biden and other world powers were in talks with Iran to resurrect the pact.
In the past few years, Iran has supported cryptocurrency mining by providing cheap power and obliging miners to surrender their bitcoins to the reserve bank. Tehran enables cryptocurrency mined in Iran to be used to pay for permitted commodities imports.
According to some accounts, the government views Bitcoin mining as a viable means of circumventing US sanctions. Iran is currently subject to a near-complete embargo imposed by the United States, which has a detrimental impact on the country’s economy.
Despite the prohibition, illegal underground mining is said to have persisted, and on Wednesday, it was revealed that Ali Sahraee, the director of Teheran’s Stock Exchange (TSE), had resigned after state-run news outlets reported that cryptocurrency mining was actually occurring at the exchange throughout the ban.
The possibility of cheap energy has drawn miners to Iran, mainly from China. According to Elliptic, producing the electricity they use, needs the equal of about 10 million barrels of crude oil each year or 4% of total Iran’s oil export shipments in 2020.
You Must Read: Malaysian Police seize another 211 Bitcoin Mining Machines