By Bhushan Akolkar (Fri, October 01, 2021)
Iran has once again decided to resume crypto mining operations in the country following a three-month ban. Former President Hassan Rouhani had imposed the ban earlier this year on May 26, 2021. The ban was first introduced following concerns of the stability associated with the country’s unreliable power grid.
Back then, Iran was facing extreme power outages during the summer due to extreme heat. Back then, the temperatures peaked at 50-degree Celsius or 120-degree Fahrenheit. Thus, with rampant power outages and water shortages in the country, Rouhani decided to put a ban on crypto mining activities.
With the new President Ebrahim Raisi taking charge of the office last month on August 3, the new regime has reconsidered his options. The President has now lifted the ban on crypto mining. Iran has been one of the most preferred destinations for crypto mining activities in recent times.
This is because the country has one of the cheapest electricity rates. It is also because of the abundant fossil fuel resources such as natural gas. Iran has a sizeable contribution of 4.5 percent to 7 percent of the world’s crypto mining activities.
Dodging the U.S. sanctions
Furthermore, Iran’s stand with Bitcoin and cryptocurrencies could be friendlier. Iran holds a favorable outlook towards Bitcoin mining as it facilitates its evasion of sanctions from the United States. Strong sanctions put forward by the United States have impacted the country’s economy to a great extent.
Thus, crypto mining seems to be a favorable option in this case. Reportedly, mining brings an estimated $1 billion in revenue for the country.
However, the latest news is that despite the ban, some underground mining reportedly continued in Iran. Recently, a state-run media reported that crypto mining was still taking place at the Tehran Stock Exchange (TSE) during the ban. Following this news, Ali Sahraee, the director of Teheran’s Stock Exchange (TSE) had to resign.
Interestingly, Iran’s decision comes at the right time when China has introduced an outright ban on crypto. Many miners have already moved their mining rigs to other overseas locations. Although a large part of them have moved to North America, Iran stands to benefit from the same.
The Chinese government has shown a hostile attitude towards crypto. It has especially in recent months clamped down on mining in the country. Recently, Elon Musk said that the ban introduced by china on mining could be due to the electricity shortages that the country is facing.