Iran has banned miners from supporting Bitcoin and other cryptocurrency networks before the summer season when the country’s electricity consumption peaks.
President Hassan Rouhani announced the ban on state television on Wednesday, stating that about 85 percent of existing bitcoin mining activity in Iran is illegal. To combat money laundering, China has made trading in cryptocurrencies illegal since 2019. On the one hand, Iran obviously sees the mining of cryptocurrencies as a source of income for the state. Because of this, Iran and China are working together to prevent cryptocurrency mining.
ONLY IN | Iran bans the power-intensive mining of cryptocurrencies like Bitcoin after rising consumption contributed to power outages in major cities. Https://t.co/KngKCV7wbH via @crypto
– Bloomberg Crypto (@crypto) May 26, 2021
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China had already announced a new crackdown on cryptocurrency mining in the country, which took place after several fatal accidents in coal mines in different parts of China. As the demand for coal power from Bitcoin miners increased, these mines were used without the consent of the authorities.
“The increasing demand for coal caused some producers to reopen closed mines without official approval, which posed an increased safety risk and increased the number of fatal incidents that year”.
The recent Chinese ban on crypto miners dropped Bitcoin well below $ 40,000, with BTC getting dangerously close to $ 30,000. However, the main prize of the cryptocurrency hit the psychological price barrier of USD 40,000 earlier today. Bitcoin market cap at the time of writing is $ 742,645,856,339, along with a trading volume of $ 55,170,597,224.
Elon Musk and Michael Saylor met with executives from senior Bitcoin miners in the US last week to discuss the transition to renewable energy and the formation of the Bitcoin Mining Council.
Yesterday I was happy to host a meeting between @elonmusk and the leading bitcoin miners in North America. The miners have agreed to form the Bitcoin Mining Council to promote transparency of energy use and accelerate sustainability initiatives around the world. https://t.co/EHgLZ9zvDK
– Michael Saylor (@michael_saylor) May 24, 2021
The Iranian President said on local television on May 26 that the country’s Bitcoin mining ban would be extended until the end of September. He added that 85 percent of Iranian miners work without a permit, even licensed miners may be forced to go underground as a result of this decision.
The crypto rush, increasing production and a drought that has reduced hydropower generation are blamed by officials for the power outages that are affecting businesses and daily life in Iran.
The decision could push the licensed minority into the black market, which authorities also wanted to crack down on, and even enlist the help of spies to track down illegal miners who hide computers in everything from households to mosques. Frequent blackouts in numerous major cities have also prompted the government to take these measures.