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Iran to lift cryptocurrency mining ban in September

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According to Iranian media, Financial Tribune, Tavanir, the country’s power utility company has stated that the ban issued by the ministry of industry, mining and trade, affecting authorized miners will be lifted on the 22nd of September. This means authorized Bitcoin miners will be able to resume their operations after the electricity preservation policy that forced the country to ban mining cryptocurrencies in May.

The Iranian government had earlier banned Bitcoin (BTC) and crypto mining operations back in May. At the time, the decision was reportedly made to prevent miners from overburdening the electricity grid in the country because Bitcoin miners have been blamed for the constant blackouts and power shortages in Iran. Because of this issue, Iran reportedly paused electricity exports to neighbouring Afghanistan.

The publication states that only authorized miners will be cleared to resume operations once the moratorium lifts in September. This is because illegal crypto mining operations are reportedly the reason for the significant strain on the electricity supply.

Iran has been legalizing Bitcoin mining since 2020 with over 1,000 licenses issued in January 2020. The government appears keen on localizing its crypto mining sector, with parliament even considering a bill to ban the use of “foreign-mined” cryptocurrencies for payments in the country.

It’s been estimated that registered mining entities account for only around 300 megawatts (MW) of consumption when illegal miners burn up to 3,000 MW a day, which is half of what the capital Tehran needs. Because of this, Iranian authorities went after unregistered miners stating that they not only use a lot of energy but also damage the electrical grid. Tavanir started to uncover and disconnect illegal mining farms. The utility has confiscated more than 212,000 units of mining equipment in the past year claiming the caused damages amount to 180 trillion rials (over $4 million).

What they are saying

Mostafa Rajabi Mashhadi, spokesman for the state-owned utility company Tavanir, told ISNA news agency that the hope is that power consumption across the Islamic Republic will decline by the end of summer. He further explained that a drop in electricity demand when temperatures begin to fall will create conditions for restarting the operations of legal digital currency miners.

Bottomline

The Iranian government stated that they expect Bitcoin and crypto mining to become a significant economic activity in the country, as they forecast to generate a revenue of $1 billion in 2021. This forecast could be unattainable now due to the ban on mining operations.

Iran’s cryptocurrency acceptance policy might also be set for a significant increase as the country’s tax agency recently called for a legal framework for cryptocurrency trading activities.

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