Iran has prohibited energy-intensive mining of cryptocurrencies such as Bitcoin for nearly four months, President Hassan Rouhani announced on Wednesday, citing the country’s ongoing struggle with basic energy shortages in a number of towns.
“The moratorium on cryptocurrency mining is environmentally favorable and will last until September 22. Approximately 85 percent of Iran’s existing mining is unlicensed “censured,” Rouhani stated during a televised cabinet meeting speech.
Bitcoin (price in India) and different cryptocurrencies are created via a process known as mining, in which incredibly effective computer systems compete to resolve difficult mathematical problems. The process is extremely energy intensive, as it is often powered by electricity supplied by fossil fuels, which Iran is abundant in.
As the presidential election next month approaches, Iranians have been outspoken in their criticism of the blackouts.
The federal government has attributed the power outages on bitcoin mining, dryness, and increased electrical energy demand during the summer season.
According to blockchain analytics firm Elliptic, Iran accounts for roughly 4.5 percent of all Bitcoin mining, allowing it to generate hundreds of thousands of dollars from cryptocurrencies that can be used to mitigate the impact of US sanctions.
Iran’s banking sector has been harmed since 2018, when former President Donald Trump pulled Iran out of the 2015 nuclear deal with six states and reimposed sanctions.
The government of US Vice President Joe Biden and a variety of other international powers have been in talks with Iran to resurrect the deal.
Iran has just accepted crypto mining, offering low-cost energy and obliging miners to promote their bitcoins to the central monetary institution. Tehran permits the use of cryptocurrency produced in Iran to pay for authorized device imports.
The possibility of low-cost vitality has drew miners to Iran, most notably from China. Producing the electrical energy they consume needs the equivalent of around 10 million barrels of crude oil per year, or 4% of total Iranian oil exports in 2020, according to Elliptic.