Following a three-month prohibition issued by former President Hassan Rouhani on May 26th, 2021, the Iranian government will allow licensed cryptocurrency miners to begin operations today.
The original restriction was imposed owing to worries about the country’s unstable electrical grid’s reliability.
During the summer, the Middle Eastern country had severe power disruptions, which former President Rouhani blamed on the high heat. The temperature reached 120 degrees Fahrenheit, or nearly 49 degrees Celsius, on certain days.
Due to power disruptions and water scarcity, Rouhani decided to prohibit crypto mining during the summer to guarantee that residents could keep their air conditioners running — however, others have questioned how much electricity crypto mining consumes in the country. The crypto mining prohibition has been removed when the heat subsides and Ebrahim Raisi takes office as president on August 3rd, 2021.
Iran is home to between 4.5 percent and 7% of the world’s bitcoin mining. It should come as no surprise that, owing to vast fossil fuel resources such as natural gas, Iran has among the lowest power prices in the world.
According to some sources, the nation favors Bitcoin mining as a method to circumvent US sanctions. The United States has imposed a near-total embargo on Iran, which has had a severe impact on the country’s economy. Elliptic, through Reuters, estimates that income from mining in Iran will be approximately $1 billion at present levels.
Despite the prohibition, underground mining is said to have persisted, and Ali Sahraee, the director of Teheran’s Stock Exchange (TSE), resigned on Wednesday when state-run media claimed that cryptocurrency mining was going on at the exchange throughout the ban.
TSE leadership first disputed the mining operation’s existence, but subsequently, executive deputy director Beheshti-Sarsht stated that the TSE should be held responsible.