Iran prepares to remove restrictions imposed on cryptocurrency mining in response to electricity shortages this summer. According to Iranian media, the country’s power utility company has stated that the ban affecting authorized miners will be lifted as early as next month.
Licensed Miners in Iran to Resume Bitcoin Minting
The temporary ban on crypto mining, introduced earlier this year by the Iranian Ministry of Industries, Mining and Trade, will be lifted on Sept. 22, the English-language business daily Financial Tribune reported. The important announcement was made by the Iran Power Generation, Distribution and Transmission Company, Tavanir.
The hope is that power consumption across the Islamic Republic will decline by the end of summer, Mostafa Rajabi Mashhadi, spokesman for the state-owned utility, told ISNA news agency. A drop in electricity demand when temperatures begin to fall will create conditions for restarting the operations of legal digital currency miners, he noted.
The restrictive measure was announced in May, by the then Iranian President Hassan Rouhani, amid an increasing power deficit causing blackouts in many parts of the country. The energy-intensive coin minting process was partially blamed for the shortages.
When the unusually hot weather led to a serious increase in consumption, Iranian regulators initially said licensed miners would be shut down during peak hours. Eventually, the government decided to go with a blanket ban on mining until the end of summer.
Tavanir Seizes Over 200,000 Illegal Mining Rigs in 12 Months
The suspension of authorized mining has been met with frustration and criticism from the local crypto community. It’s been estimated that registered mining entities account for only around 300 megawatts (MW) of consumption when illegal miners burn up to 3,000 MW a day, which is half of what the capital Tehran needs.
Iran recognized cryptocurrency mining as a legal industrial activity in July 2019. Mining businesses were required to obtain a license from the Ministry of Industries and pay for the used electricity at export prices. The department has issued mining permits to 30 companies, according to its website.
Since April, when the Energy Ministry revised its rules, miners are charged 16,574 rials ($0.39) per kilowatt-hour, which is four times the initial rate. However, the tariff is cut in half when household consumption is low and the grid is not stressed and respectively, doubled during periods of energy deficits.
Meanwhile, Iranian authorities went after unregistered miners insisting they not only use a lot of energy but also damage the electrical grid. Tavanir started to uncover and disconnect illegal mining farms. The utility has confiscated more than 212,000 units of mining equipment in the past year claiming the caused damages amount to 180 trillion rials (over $4 million).
What do you think will be the future of cryptocurrency mining in Iran? Share your expectations in the comments section below.
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