Iran Banned Bitcoin Mining Due to Electricity Problems

Iranian authorities have banned cryptocurrency mining until September 23. The reason was the shortage of electricity in the summer. According to Bloomberg, the ban was announced by President Hassan Rouhani and took effect on May 26.

Power outages in Iran have begun over the past few years, partly related to the growing popularity of mining, which requires a significant amount of electricity. According to analyst company Elliptic, Iran accounts for 4.5% of the world's mining volume, which could provide the country with a total of about $1 billion a year, allowing it to bypass international sanctions.

Before that, mining in Iran was officially allowed and supported by the government of the country. The state provided representatives of this profession with additional subsidies for electricity, in exchange for requiring them to sell the cryptocurrency to the Central Bank of Iran, which pays for part of the imports with it.

This attracted many foreign companies to the country. First of all, China, where the pressure on miners increased, became interested in such prospects. Many of them moved to Iran, which contributed to the development of the industry.

At the same time, a few miners working under license, in accordance with the law adopted in 2019, pay for electricity at a higher tariff, and the mined bitcoins are sold to the Central Bank of Iran. But, according to the authorities, 85% of mining in the country is conducted without a license. Moreover, mining equipment is often installed by enterprising Iranians in mosques, where electricity is generally free.