Bitcoin miners in Iran get green light to resume operations after four-month hiatus – but this might only be temporary
- The Iranian government has officially lifted the ban on cryptocurrency mining for licensed operators.
- However, around 85% of cryptocurrency mining in the country occurs illegally, wreaking havoc on this power grid.
- The future of cryptocurrency mining in the country remains uncertain, with the winter months set to wreak havoc on the power grid and
American sanctionsstill weighs heavy Iranthe economy of.
Miners in China may be deported from their country, but the mining industry in Iran just got the
green light legally resume operations. The Gulf country was forced to ask miners to close their doors amid the extreme summer heat that wreaked havoc on the country’s power grid in May.
Now that the hottest months of the year are over, minors can go out and play without the risk of a power outage. Based on Cambridge Bitcoin electricity consumption (
CBEC) Index, Iran is home to about 4.6% of the world’s miners. However, the future remains uncertain of these miners being able to stay in line with the onset of winter triggering another round of power shortages. Just as air conditioning wreaks havoc on the electricity grid during the summer months, the energy requirements for heaters at night increase when temperatures drop to between 1 and 8 degrees Celsius.
Only “licensed” cryptocurrency miners are allowed to come back online
According to Iranian electricity company Tavanir, there are only 50 Bitcoin agricultural factories that have a legal license to operate in the country. They only consume 300 megawatts of electricity. However, 85% of mining operations carried out in Iran are illegal.
On Wednesday, September 29, Ali Sahraee – CEO of the Tehran Stock Exchange (TSE) – reportedly resigned after cryptocurrency mining rigs were
discovered in the basement of the TSE during a raid.
During the four-month ban, authorities also carried out numerous other raids to track down crypto miners across the country, big and small. The current permission for crypto miners to come back online is limited to those who are operating legally. Using household electricity to mine Bitcoin, Ethereum, and the like is still not legal. And, those who break the law might
incur heavy fines.
US sanctions could leave Iran with no choice but to use cryptocurrencies for international trade
When the summer cryptocurrency ban was implemented, President Hassan Rouhani was at the helm. However, with
Raisi, a hard-line conservationist, has no plans to give in to pressure from the US government limiting Iran’s nuclear program in exchange for a relaxation of the law on combating the country’s opponents. America through sanctions (CAATSA). He has reiterated, on several occasions, that Tehran will not agree to any deal until the sanctions are completely lifted – and not just relaxed.
Sanctions not only limit Iran’s ability to trade internationally, they also isolate the country from the global monetary system. Cryptocurrency is a roundabout way of exploiting this market with the help of the United States.
Iranian officials and traders are said to have become adept at evading sanctions by using cryptocurrency to bypass the banking system. The transfer of the actual cargo occurs in the form of secret “ship to ship” transfers while it is still at sea.
It should be noted that Iran has the fourth largest oil reserves in the world, but cannot exploit them due to economic sanctions. With some of the cheapest electricity prices in the world, cryptocurrency may be one of the ways the country can keep its economy alive without having to bend to the will of the United States.
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