Iran Blaming Bitcoin Mining for Blackouts Yet Again, Bans Crypto Mining for Four Months
Iran is banning the mining of Bitcoin, and other cryptocurrencies over concerns of high levels of energy consumption said President Hassan Rouhani on state TV on Wednesday.
The ban is effective immediately and will last until September 22.
According to the University of Cambridge, Iran accounts for 3.82% of Bitcoin mining as of April 2020. Iran comes at sixth place globally, with China at the top with a 65.08% market share, followed by the US at 7.24%.
The country has been suffering a series of blackouts across major cities. And Iran officials are blaming the surge in crypto mining along with increased manufacturing and a drop in hydroelectricity supply for these blackouts.
In January this year, Iranian authorities blamed the vast blackouts and “dangerous” air pollution on Bitcoin mining. But a crypto researcher refuted such claims, saying “mining is a very small percentage of the overall electricity capacity in Iran” and that mismanagement, outdated equipment of power plants, and terrible situation of the electricity grid in the country are responsible for it.
Iran is currently negotiating with the US to revive its 2015 nuclear deal, which would ease sanctions and allow foreign companies to provide the infrastructure investment in its power grid.
Just last month, Iran’s central bank allowed its financial institutions, including banks, to use cryptos derived from the sanctioned miners to pay for its imports.
Now, the government is shutting down mining for a period of four months. Previously, they have been cracking down on unlicensed miners who were hiding machines in their homes and mosques.
However, Member of Parliament Hossein Haghverdi is urging the government to find the real reasons behind frequent blackouts as they are becoming “a serious security issue.”
Iran has 50 licenses mining centers spread across fourteen of its 31 provinces, consuming a combined 209 megawatts of electricity, according to grid operator Tavanir as stated by local publication, a semi-official Tasnim news agency.
Electricity company spokesman Mostafa Rajabi Mashhadi told Arab News that they had to cut power to four “overusing” government bodies, “while registered crypto mining farms had voluntarily shut down operations to ease the burden.”