Iranian President Says
Cryptocurrency Mining 'Must Stop' Until September
May 27, 2021
Iranian President Hassan Rohani has announced a four-month ban on
all cryptocurrency mining in response to unplanned power cuts that
have hit major Iranian cities.
In televised remarks on May 26, Rohani said “cryptocurrency
activities and mining cryptocurrencies must stop" across Iran until
Iranian officials have repeatedly blamed unlicensed cryptocurrency
miners for using vast amounts of electricity -- draining the power
grid and raising air pollution levels in many cities.
The operations are an enormous energy drain because they use banks
of high-powered computers to try to unlock complex numerical puzzles
related to international financial transactions.
When successful, cryptocurrency miners create units of so-called
digital coins that can be traded globally without the scrutiny and
restrictions of traditional financial markets.
Facing tough U.S. economic sanctions, Iran in August 2019 eased
restrictions on cryptocurrencies to circumvent the traditional
financial markets it is blocked from using.
As a result, cryptocurrencies like bitcoin that are “legally” mined
in Iran can now be used to finance imports from other countries.
Meanwhile, Iran's subsidized energy has made power-sucking mining
operations cheaper there than in other countries.
Iranian authorities admit that this has caused thousands of
"illegal" cryptocurrency farms to sprout up.
Rohani said on May 26 that "illegal" cryptocurrency miners who have
access to subsidized power are now consuming up to seven times more
power than those with permits for legal cryptocurrency operations.
introduced rolling blackouts on May 23 to reduce pressure on the
national power grid.
National electricity company spokesman Mostafa Rajabi Mashhadi said
on May 22 that licensed cryptocurrency miners have already
voluntarily shut down their operations to ease the burden.
On May 25, Energy Minister Reza Ardakanian issued an apology to
Iranians for "shortcomings and pressures" that have resulted in
Ardakanian said Iran's power grid was overburdened because a drought
has reduced hydropower generation while unexpectedly warm weather
has raised demand for air conditioning.
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