Billion-dollar Bitcoin mining industry resumes in Iran after three-month ban
The Iranian government will allow licensed cryptocurrency miners to resume operations today following a three-month ban imposed by former President Hassan Rouhani on May 26, 2021.
The initial ban was implemented due to concerns over the stability of the country’s unreliable electricity grid.
The Middle Eastern country experienced widespread power outages over the summer, which former President Rouhani attributed to the extreme heat. Some days, the heat exceeded 120 degrees Fahrenheit, or nearly 49 degrees Celsius.
The Middle East and Central Asia are experiencing the most violent heat wave in history this time of year. In # Iran 51.0C in Omidieh, 50.1C in Abadan, 45.5C in Bam (920m asl). In Turkmenistan 46.7C Uchadzhi, in Uzbekistan 44.7C in Termez, in Tajikistan 43.7C in Isambaj (563m). pic.twitter.com/AQ5bpt93vM
– Extreme temperatures around the world (@extremetemps) June 5, 2021
In light of power outages and a water shortage, Rouhani decided to ban crypto mining during the heat to ensure citizens can keep their air conditioners running – although doubts have been expressed in some circles as to how much energy crypto mining actually uses in the country. As the heat subsides and Ebrahim Raisi takes office as president on August 3, 2021, the ban on crypto mining has been lifted.
It is estimated that 4.5% to 7% of the world’s cryptocurrency mining is done in Iran. It is perhaps not surprising that Iran has some of the cheapest electricity prices in the world thanks to abundant fossil fuel resources such as natural gas.
Some reports suggest that the country views Bitcoin mining favorably as a way to evade US sanctions. Iran is currently suffering from an almost complete embargo imposed by the United States, negatively affecting the country’s economy. At current estimated levels of mining in Iran, revenues are estimated by Elliptic via Reuters to be around $ 1 billion.
Despite the ban, underground mining reportedly continued and on Wednesday news broke that Ali Sahraee, the director of the Tehran Stock Exchange (TSE), had resigned after public media reported that mining of cryptocurrency was held on the exchange during the ban.
TSE management initially denied the existence of mining, but later Deputy Executive Director Beheshti-Sarsht admitted that TSE should be held accountable for the operation.