After a three-month ban by former President Hassan Rouhani, Iran will allow cryptocurrency miners licensed to resume their operations today.
Due to concerns about the reliability of the country’s power grid, the initial ban was placed in effect.
In the middle east, there were many power outages during summer. Former President Rouhani blamed extreme heat. Some days the heat reached as high as 120 degrees Fahrenheit (or nearly 49 degrees Celsius) on some days.
The heatwave is the worst in history for the Middle East and Central Asia at this time of year. In #Iran 51.0C at Omidieh,50.1C at Abadan,45.5C at Bam (920m asl). In Turkmenistan 46.7C Uchadzhi,in Uzbekistan 44.7C at Termez,in Tajikistan 43.7C at Isambaj (563m). pic.twitter.com/AQ5bpt93vM
— Extreme Temperatures Around The World (@extremetemps), June 5, 2021
Rouhani made the decision to ban crypto mining in heat due to power outages and water shortage. However, there have been some doubts in some quarters as to how much power crypto mining is actually using in the country. The crypto mining ban was lifted as the heat has subsided and Ebrahim Raisi took office on August 3, 2021.
Iran is home to between 4.5% and 7% of all cryptocurrency mining in the world. You may not be surprised to learn that Iran has some of the lowest electricity prices in the world due to its abundant fossil fuel resources like natural gas.
Some reports suggest that Iran favors Bitcoin mining to avoid sanctions from the USA. The USA has placed a complete embargo on Iran, which is negatively impacting the country’s economy. Elliptic via Reuters estimates that revenues from Iran’s current mining operations are approximately $1 billion.
Underground mining continued despite the ban. On Wednesday, news broke that Ali Sahraee (director of Teheran’s Stock Exchange (TSE)), had resigned following reports by state media that cryptocurrency mining was taking places at the exchange during and after the ban.
The TSE leadership initially denied that there was a mining operation. However, executive deputy director Beheshti-Sarsht later admitted that the TSE should hold them responsible for it.