Iran has banned cryptocurrency mining for four months because power companies have introduced electricity in the country.
In recent weeks, businesses and families across Iran have been facing a six-hour-a-day shutdown. The power outage is detrimental to Iranian chess players in their online Asian competitive games.
“Everyone is getting a corner to write bitcoins and cryptocurrensets,” President Hassan Rouhani said on Wednesday. “Anyone who does this from today is doing illegal work, even those who are allowed [to mine bitcoins] they are not allowed until we stop the problem [of power cuts]. ”
Iran’s economy has been hit hard by Donald Trump’s idea of dragging the United States out of unity over the Tehran nuclear deal signed by international powers and imposing sanctions. The demand for digital currency in Iran has increased in recent months as people try to protect their currency against the annual inflation of 46.9%, a stable market and fixed real estate prices.
On Wednesday, Rouhani ordered the offices of corporate, telecommunications, electronics and internal affairs to reduce the cost of cryptocurrencies. He also said electricity consumption rose by 20% last year, though he did not say how this was caused by cryptocurrensets. This is the second time Iran has sought to tackle digital currency.
Cryptocurrency mining has taken a toll on Iran due to the availability of high-value electricity for items that require a lot of energy. Export items can be paid for with bitcoins. But U.S. sanctions prevent any banking activity from Iran and blockchain technology records much of the activity, making it difficult for Iranian traders to use cryptocurrency to escape sanctions.
“We have not been able to establish a connection with a reliable digital currency exchange operator due to penalties and to find us a little bit,” said a businessman close to the government.
In 2018, the US Treasury Department identified two digital addresses and linked them to two Iranian individuals who allegedly helped exchange bitcoin exchanges in Iranian churches. The Treasury has promised to “follow Iran harshly and other governments to try to use digital currency”.
Despite this, foreign traders, including China, have traded cryptocurrency mines in Iran. The Chinese-led operation in Rafsanjan, southern Iran, is said to be the largest in the country.
Polish, Indian and Turkish companies have also received permission to mine in Iran, Majid-Reza Hariri, head of the Iran-China Chamber of Commerce, told local media outlets on Tuesday.
Researchers are divided on whether bitcoin mining is the cause of the power outage. Bitcoin mines, including restricted operating systems, account for less than 10% of the country’s electricity. They also say there is a severe drought this year due to a lack of electricity.
It is also unknown at this time what he will do after leaving the post. Last week, the energy ministry tried to close one job but was shot dead.
In the meantime, the need remains high. “A friend of mine sold his house last year and bought a bribe that made him more than a year old. I think I should take another risk, “says Anousheh, a 35-year-old employee of a printing company.