- Iran’s Ministry of Industry has issued licenses to 30 crypto mining operators.
- Earlier this year, the country banned crypto mining for the summer due to energy shortages.
- Cryptocurrency mining has been criticized for its environmental impact and energy consumption.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
The Iranian Ministry of Industry has issued licenses to 30 crypto mining operators despite announcing a blanket ban on mining operations due to energy shortages earlier this year, the Financial Tribune first reported.
The newly licensed crypto miners are spread across the country, with only one of them being situated in the country’s capital Tehran, while six are located in the Semnan province.
In May the government issued a ban on crypto mining until mid-September after a series of blackouts that were linked to the energy intensive process. Drought and high temperatures have increased electricity demand and are expected to continue throughout the summer months.
Crypto mining is an energy-intensive process, as each transaction, or new purchase, requires data blocks to be validated and added to the public blockchain networks that cryptocurrencies operate on. Mining machines often require significant cooling as they work to manage this process nonstop, and critics claim that the energy used often comes from fossil fuels. The sum of the power produced by mining machines is referred to as the hash rate.
The environmental impact of crypto mining is one of the reasons for China’s crackdown on this process. The country has historically been the biggest contributor to the hash rate, accounting for over 65% of crypto mining according to the Cambridge Center for Alternative Finance. But the Chinese government has taken a series of steps recently to limit crypto miners’ activity, including banning them from operating in some regions, causing the global hash rate and trading activity to drop. The government has said this is part of its net zero strategy.
Cambridge Center for Alternative Finance data shows that Iran is the sixth largest crypto mining hub in the world, accounting for just under 4% of the global hash rate. Low electricity prices and tight restrictions on foreign currencies make crypto mining an attractive source of income in the country, where many citizens struggle to access the financial system.
The majority of crypto miners in the country allegedly operate under the radar and do not possess licenses. President Hassan Rouhani claimed this applies to around 85% of crypto miners, Reuters reported. Last week, authorities seized 7,000 crypto mining machines from illegal operators as they continue to crack down on underground crypto activities.