Iranian authorities have confiscated over 45,000 Bitcoin miners that have been illegally using subsidized electricity.
According to local news publication Tasnim, a warehouse containing mainly ASIC miners was using around 95 megawatts per hour of electricity at a drastically reduced price. Coupled with a reduction of around 45 MWh of electricity usage by street lights around Tehran and other cities, Iran’s state-run electricity company Tavanir has reduced the consumption of power that would be the equivalent of a city with a population of over half a million people.
Grappling with power issues
The report also outlines how Iran is grappling with power issues that has led the country to clamp down harder on illegal cryptocurrency mining operations in the country. The Iranian government has also had to impose short term shutdowns of authorized Bitcoin farms to prevent further strain on their power grid.
It’s understood that the scope of authorized operations that have been powered down were using around 600 MWh of electricity. This is part of an effort to deal with higher demands for power which has been driven by the country’s Covid-19 regulations which include shelter-in-place orders.
The report also notes that colder weather has increased natural gas consumption in the country, which is adding extra strain on the ability to provide fuel to the country’s power plants.
Iranian government has been buying Bitcoin from local miners
In October 2020 local state-run Iranian Students’ News Agency (ISNA) reported that Iran has changed regulations that will essentially see Bitcoin mined in the country used by the Central Bank to fund imports.
The Iranian Ministry of Energy and the Central Bank of Iran are reportedly responsible for enacting the changes to local legislation. This follows a major move in January 2020, where the Iranian government began issuing cryptocurrency mining licenses to operators in the country. Over 1000 licenses were issued at the beginning of the year. It had initially legalized cryptocurrency mining in August 2019
At the time it was reported that the cryptocurrency mining industry could add $8.5 billion to Iran’s economy, which was one of two major reasons for the move.
The major reason is the intent of Iran to use Bitcoin to potentially bypass harsh economic sanctions that have been imposed on the nation by the United States. This means that Iran is unable to use the US Dollar for imports and exports. The government also announced in July 2020 that power plants in the country could also operate their own cryptocurrency mining operations.