Iranian President Hassan Rouhani has declared a four-month moratorium on cryptocurrency mining, a practice the government has encouraged in the past.
“The ban on the mining of cryptocurrencies is effective immediately until September 22 ... Some 85 per cent of the current mining in Iran is unlicensed,” Rouhani said, Reuters reports.
Electricity is one of the few things in Iran that's cheap, thanks to the nation's abundant fossil fuels, and the Iranian government has encouraged cryptocurrency mining as both a national industry in 2019 and allowed its central bank to buy the currency from licensed vendors. But enough is enough it seems.
A presidential statement mentions increased demand for air conditioning and wells in rural area as causing earlier-than usual electricity consumption spikes. The aircon surge is not unexpected as when summer arrives in the Iranian capital of Tehran temperatures can hit stifling highs (up to 40C - or over 100 degrees in Freedom Units). Now cryptocurrency traders are being told to shut up shop until the situation improves.
- China announces ‘crackdown’ on Bitcoin mining and trading
- US Treasury wants to treat cryptocurrencies like cash – as in you need to report $10k+ transactions
- GitLab tries to address crypto-mining abuse by requiring card details for free stuff
- China all but bans cryptocurrencies
In addition to government approved-cryptocurrency miners, however, there are hordes of unlicensed miners taking advantage of cheap power. Some have even been reported operating in mosques, which have free power, and the government has cracked down to stem the drain on the national grid.
Currency analysts Elliptic estimates that 4.5 per cent of the world's supply of cryptocurrency is generated in Iran and think that the government is using the technology to get around international sanctions imposed because of its nuclear weapons program and sponsorship of terror groups.
Chinese cryptocurrency miners have been very active in the region and with the Middle Kingdom not happy about the practice on its own soil - and promoting its own Digital Yuan - it's possible outsourced operations are stepping up operations to make up the shortfall.
But with Iranian presidential elections due next month power outages aren't exactly a winning proposition. ®