Iran to Lift Authorized Cryptocurrency Mining Ban in September

Azeez Mustapha
22 August 2021 | Updated: 22 August 2021

According to local reports, the temporary ban on cryptocurrency mining instilled in the industry earlier this year by the Iranian Ministry of Industries, Mining and Trade might get lifted soon. The announcement came from the Iran Power Generation, Distribution, and Transmission Company, Tavanir.

In an interview with ISNA News, Mostafa Rajabi Mashhadi—the spokesman for the state-owned power company—noted that power consumption across Iran should decline by the end of summer. He added low electricity demand resulting from declining temperatures creates a healthy condition for restarting legal cryptocurrency mining operations in the country.

The restrictive action got implemented in May by Iranian President Hassan Rouhani, who blamed crypto mining operations for the shortage of electricity, which caused several blackouts across cities in the country.

Crypto Community in Iran Outraged by Government Action

As expected, the suspension of legal crypto mining operations sparked outrage and frustration in the local cryptocurrency community. According to analytical estimates, legal mining entities consumed only 300 megawatts (MW) daily. However, illegal miners used about 3,000 MW daily, half of what Tehran requires.

According to the official website of the Iranian Ministry of Industries, 30 mining companies received authorized licensing from the department and pay for used power at export rates.

Since the revision of the Energy Ministry’s rules in April, miners have paid 16,574 rials ($0.39) per kilowatt-hour, which is four times the original rate. However, the tariff reduces by 50% when household consumption drops significantly.

Meanwhile, Iranian authorities also went after illegal miners, noting they compromise the efficiency of the electrical grid. Tavanir reports that it had confiscated over 212,000 units of mining equipment over the past year. The utility added that these illegal miners caused damages running into 180 trillion rials ($4 million).

 

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Azeez Mustapha

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.