The Iranian government has decided to ban cryptocurrency mining in the country for a period of four months. According to President Hassan Rouhani, this activity is causing power outages across the country.
From now on, those who mine cryptocurrency in this country “will be engaged in illegal work. Even those who have received permission will no longer be eligible until we leave this issue, ”said Iranian President Hassan Rouhani, quoted by the Financial Times.
The power outage has occurred mainly in recent weeks and is caused, according to the president, by cryptocurrency mining, as “everyone finds an opportunity to mine bitcoins and other cryptocurrencies.” Electricity consumption will even grow by 20% during 2020, although it is unclear how much of this activity accounts for.
Analysts doubt bitcoin mining is the real culprit for power outages and estimate that all types of mining operations (including illegal ones) consume only 10% of the country’s energy. An alternative explanation is the severe drought that hit the country.
It is alleged that the demand for this currency in Iran has increased due to the annual inflation rate of 46.9%.
The country is a hub for foreign investment in cryptocurrency mining thanks to energy incentives set by the government, and the Chinese operation in southern Iran is estimated to be the largest in the country. They are also eligible to work with mining companies in Turkey, Poland and Turkey.
