After cities suffer unplanned blackouts, Iran has imposed a four month ban on the mining of crypto currencies, such as Bitcoin, due to its energy draining process.
President Hassan Rouhani has commented that the drought that affected hydro-electric power generation has been attributed as the main cause of the blackouts. He added that cryptocurrency mining, 85% of which is unlicensed, was draining more than 2GW from the grid each day. There have been reports that Bitcoin consumes the same amount of energy as a small county.
According to analytics firm Elliptic, the activity allows the country to bypass sanctions and earn hundreds of millions of dollars in crypto-assets that can be used to purchase imports. Around 4.5% of all Bitcoin mining takes place in Iran.
Due to the blackouts, Iran was deprived of a major source of hard currency when its banks were cut off from the global financial system.
Bitcoin mining requires enormous computing power, which in turn uses huge amounts of electricity. Bitcoin operates on the blockchain, a digital ledger of transactions. Miners audit Bitcoin transactions in exchange for an opportunity to acquire the digital currency
Analytics firm Elliptic said Iranian authorities officially recognised cryptocurrency mining in 2019 and later established a licensing regime that required miners to identify themselves, pay a higher tariff for electricity, and to sell their mined bitcoins to the Central Bank of Iran.
The national electricity company said that licensed cryptocurrency mining facilities had already voluntarily shut down their operations to ease the burden however unlicensed facilities were using between six and seven times more power and that he therefore had to ban all cryptocurrency activities until 22 September.
FOR HELP WITH BUSINESS & INDIVIDUAL ACCOUNTING
PROBATE, ESTATES, WILLS & WEALTH
CONTACT WALSH WEST CCA - WALSH WEST LAW
LINES OPEN 7 DAYS A WEEK:
+44 0203 488 7503 - 01992 236 110
www.walshwestcca.com