Cryptocurrency mining has been banned in Iran on the grounds that it consumes too much energy. Local miners will only be able to resume work at the end of winter.
Under pressure from the Iranian Energy Ministry’s demands, local cryptocurrency miners must suspend operations. The authorities justify their decision with electricity shortages during the winter. Mining devours too much electricity for licensed mines to continue operating. This is not an unprecedented situation: the Iranian authorities have taken such measures before, only that in spring and summer.
Cryptocurrency mines have had their electricity cut off in Iran
According to the Iranian authorities, mining consumes too much energy, resulting in fairly frequent power cuts. An earlier ban was imposed in May 2021. Officials argued that the power grid could not withstand the kind of exploitation that BTC mining requires. Matters were not made easier by very high temperatures. The ban was finally lifted on September 22, when temperatures dropped.
After three months, the Ministry of Energy again forced the miners to cease operations. This was because energy consumption had risen to maximum levels during the winter. To prevent further power cuts, the authorities decided to cut off power to licensed cryptocurrency mines, turn off lanterns in some areas and put energy consumption under Strict surveillance.
Mostafa Rajabi Mashhadi, president of Iran’s Grid Management Company, explained that these steps are absolutely necessary in light of the Meteorological Organization’s forecasts, as severe cold weather is expected in the near future. Without the precautions taken, there would be a surge in energy consumption that would very likely cripple the national power grid.
Strict policy of the Iranian authorities
Until recently, Iran could boast of being one of the world leaders in cryptocurrency mining. After the bans imposed in May and now, the country’s position has been seriously weakened. The strict policy on mining does not allow local miners to spread their wings. In 2021, Iranian authorities confiscated Around 7,000 excavators, most of which were located in an abandoned factory in the Tehran area.