Due to the dry season in the country, the production of electricity fell. Miners’ consumption could increase problematic situations such as blackouts, according to the government.
Mostafa Rajabi, the spokesman of Iran’s Energy Minister, talked about the people who mine cryptocurrencies from their homes. He stated that, once the authorities identify them, they will receive significant fines as a punishment. The main reason for that is the impact that this has on electricity consumption in the country.
Rajabi argues that cryptocurrency mining is one of the two big threats to the electricity supply this year. Besides, there has been a decline in hydroelectric power generation due to the dry season. According to the official, this activity could even cause blackouts in many areas of the country.
Government entities decided to apply heavy penalties on those who are detected conducting this activity from their homes. Additionally, they will have to compensate for the damage that they do to the national electricity supply, according to The Tehran Times.
They stress that the damage that over-demand can cause to distribution grids and generators is the main problem. In 2020, electricity providers agreed with the government to supply the surplus exclusively to cryptocurrency miners. However, this consumption does not receive the subsidies that the State provides.
Cryptocurrency Mining Is a Relevant Matter in Iran
The low cost of electricity has allowed Iran to rank as one of the most relevant countries for cryptocurrency miners worldwide. It has even awakened the interest of miners originally based in China, another fertile ground for this industry.
Cryptocurrency mining in this country received its approval in 2019 and has been growing since then. At the beginning of this year, the authorities closed 500 illegal farms dedicated to this activity, in addition to more than 1,000 previously closed.
The news on the Iranian government’s interest in using cryptocurrencies to pay for imports has been another relevant matter since last year. To enable this strategy, the authorities forced the miners based in the country to sell their cryptocurrencies to the central bank.
The government of Iran also banned the purchase of cryptocurrencies mined abroad. In other words, it is only possible to purchase those coins extracted in the country. The purpose of this decision is to avoid a flight of capital. However, cryptocurrency trading remains forbidden in the country except for the sale to the central bank. For that reason, the regulations only reinforce others that the authorities previously imposed.
Iran and Its Position on Foreign Cryptocurrency Mining
Iran banned transactions with Bitcoin and other cryptocurrencies mined or extracted outside the country. According to reports, the central bank adopted new measures to restrict operations of this type in Iran.
The central bank announced that, according to the Cabinet’s decision, making transactions with digital currencies mined outside the country is forbidden. In other words, it is only possible to use coins mined within the country. The government made this announcement on Iran International a UK-based Persian television station.
By Alexander Salazar
