Iran Blocks Cryptocurrency mines for four months amid power cuts

It is no secret that cryptocurrency mining is having a huge impact on the carbon emission levels throughout the globe and has increases energy consumption significantly since the last few years due to ever-increasing cryptocurrency trading and mining processes. In Iran, power cuts have become a cause for concern as more and more energy resources are being utilized by miners and cryptocurrency traders. The presidential elections are next month, and Iranians are trying hard to get their voices heard so that the issue is worked upon.

Bitcoins and many other cryptocurrencies are made through the process of mining, in which supercomputers work together to solve varieties of complex mathematics problems, requiring many high-energy reserves to run continuously. These mining processes need a constant power supply, and due to the increasing power cuts, they are increasingly utilizing fossil fuels as energy resources that are available to Iranians easily. This, in turn, causes more environmental concerns along the region. 

Iran’s President, Hassan Rouhani, during an interview, announced that they are banning all forms of cryptocurrency mining for four months in the midst of the ongoing power cuts and shortage of electricity supply. He further added that close to 85% of the total cryptocurrency mining in Iran is unlicensed and is using resources at an alarming rate. Iran has been facing major power cuts in many cities recently, making this move an essential step towards regulated and licensed mining within the country. 

As the presidential elections are due next month, Hassan has made this move to strengthen his relations with the Iranian public by bringing this welcome change of blocking crypto asset mining for a short duration of time. This will facilitate stabilizing the electricity flow and eliminating unlicensed mining entities eating away the power resources meant for the public. The government has blamed mining, the increased energy demand in the summer time, and droughts for the frequent power cuts.

According to reports, close to 4.5% of the worldwide cryptocurrency mining is done in Iran, which accounts for hundreds of millions worth of crypto tokens, helping to lessen the impacts of U.S. sanctions. After the Chinese government made mining nearly impossible in their country land, miners have found Iran a great place to start mining due to cheap power.  After Donald Trump’s term ended, the Joe Biden Administration has been working hard to revive the nuclear deal with Iran. The Iranian government has even accepted cryptocurrency mining in recent years, and Tehran allows using cryptocurrencies mined within the country as a means of payment for the import of authorized goods.