Iran to cut electricity supply to legal crypto miners

In 2019, Iran became one of the first countries to legalise crypto mining

An Iranian flag at the Azadi football stadium in Tehran                                 
Iran has embraced cryptocurrencies as a way around US sanctions – Photo: Getty Images
                                

Iran has announced that from 22 June, 118 government-authorised crypto mining operations will have their electricity supply cut off.

This was announced by Mostafa Rajabi Mashhadi, a spokesperson for Iran’s power industry, in an interview on state TV, Bloomberg reports.

Last week (13-19 June), Iran used a record 62,500 megawatts (MW) of electricity, which Rajabi Mashhadi said was “a significant figure”.   

According to forecasts, the country’s consumption of electricity this week will exceed 63,000 MW.

Iran one of first countries to legalise crypto mining

In 2019, Iran became one of the first countries to legalise crypto mining, as the country viewed digital assets as a robust way of dealing with sanctions imposed upon the country by the US.

Elliptic reported in May 2021 that Iran’s level of mining and Bitcoin (BTC) production amounted to revenues close to $1bn (£816m).

The US sanctions on Iran mean there is an economic embargo on all Iranian imports and Iranian financial institutions. This has led to the country embracing crypto mining.

This is not the first time Iran has put a stop to crypto mining. In 2021, Iran twice announced four-month bans, as crypto mining was draining more than two gigawatts (GW) of energy from Iran’s grid every day.

Iran plans to launch a pilot for a national crypto

In January 2022, the Central Bank of Iran (CBI) said it plans to launch a pilot for a national cryptocurrency soon. This would herald the arrival of an Iranian central bank digital currency (CBDC).

Mehran Moharamian, vice-governor for IT affairs at the CBI, said the central bank views cryptos “as a solution for resolving inconsistencies and decentralising resources”. Moharamian went onto say that cryptos and CBDCs are something numerous countries have seen benefits from.

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