Iran bans crypto mining after blackouts

Iran has ordered its citizens to stop mining cryptocurrencies after a series of power cuts

A pile of bitcoins                                 

Iran has announced a four-month ban on cryptocurrency mining after the Middle Eastern country was hit by electricity blackouts.

The Tehran government announced on 26 May that it was calling a halt to the activity after many cities lost their power.

Iranian president Hassan Rouhani said that while drought was having an impact on hydroelectric power generation, the amount of people mining crypto used 2GW of the nation’s power every day.

He told a televised cabinet meeting: “The ban on the mining of cryptocurrencies is effective immediately until 22 September,” adding: “Some 85% of the current mining in Iran is unlicensed.”

The president also said that unlicensed miners were using six or seven times more power. 

Why Iranians mine cryptocurrency

Around 4.5% of the world’s cryptocurrency mining takes place in Iran, at least partially due to the country’s citizens looking for ways around US sanctions.

According to Reuters, Iran has accepted mining in recent years, offering cheap power and requiring miners to sell their bitcoins to the country’s central bank.

People are allowed to use cryptocurrencies mined in Iran to pay for imports of authorised goods.

Rouhani’s edict comes as the country prepares for presidential elections in June, where power shortages are set to be a major issue. 

 

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