Iran temporarily bans cryptocurrency mining after blackouts

Iran temporarily bans cryptocurrency mining after blackouts
President Hassan Rouhani has announced a four month ban on cryptocurrency mining, which has been blamed for a string of power cuts in Iran.
2 min read
Cryptocurrency mining has been blamed for power cuts across Iran [Getty]

Iran's President Hassan Rouhani on Wednesday announced a four-month ban on all cryptocurrency mining, a day after his energy minister apologised for unplanned power cuts in major cities.

Iranian officials have regularly blamed unlicensed cryptocurrency miners for using vast amounts of electricity.

"Cryptocurrency activities and mining cryptocurrencies must be stopped" until September 22, Rouhani said in televised remarks.

Power cuts in the peak summer months are not uncommon in Iran, but Tehran and several other major cities were hit by unplanned blackouts late last week, sparking complaints from consumers and businesses.

Iran started rolling blackouts from Sunday to reduce the pressure on the national grid.

Rouhani said "illegal" miners who usually have access to subsidised electricity consume between six and seven times more power than those with permits.

Energy Minister Reza Ardakanian apologised to Iranians on Tuesday for "shortcomings and pressures" over the surprise blackouts.

He said the national grid was overburdened due to a drought impacting hydropower generation and unexpectedly warm weather causing a surge in demand for air conditioning.

National electricity company spokesman Mostafa Rajabi Mashhadi said on Saturday that licensed cryptocurrency-mining farms had already voluntarily shut down operations to ease the burden.

Profitably creating, or mining, bitcoin and other cryptocurrencies requires masses of computers dedicated to solving deliberately complicated equations - an endeavour that globally consumes more electricity than entire nations.

According to consultant and expert on cryptocurrencies Michel Rauchs, about five to 10 percent of world bitcoin mining can be traced to Iran.