While the Beijing government cracks down on its operations, Chinese miners have been looking for other jurisdictions. Iran has become a promising destination by providing inexpensive energy. However, the country’s state-owned utility has raised concerns about a possible influx of miners and illegal imports of mining hardware from China.
Tavanir warns of flooding of Chinese miners and equipment into Iran
Iran’s Power Generation, Distribution and Transmission Company, Tavanir, has issued a warning regarding the entry of Chinese cryptocurrency miners into Iran amid China’s ongoing crackdown on the industry. The state utility shared its concerns in correspondence with the Central Task Force on Combating Goods and Foreign Exchange Smuggling.
In a letter published by the business news website Eghtesadnews, Tavanir boss Mohammad Hussein Motevallizadeh referred to media reports about the closure of mining facilities in China. The government’s offensive against the sector could push Chinese miners to other countries, the executive warned, according to the report quoted by the English-language business newspaper Financial Tribune.
Motevallisadeh called for strict controls to be put in place to prevent a massive influx of mining companies and coinage machines from the People’s Republic to Iran, stating:
Lower electricity costs make Iran attractive to Chinese miners. They will likely start smuggling mining equipment into the country.
Cryptocurrencies are growing in popularity in Iran, with many Iranians investing amid the boom Prices over the past year. Cheap, subsidized electricity has also catalyzed crypto mining, and the Islamic Republic recognized it as a legal industrial activity in the summer of 2019. Iran has grown in importance as a mining destination, and according to a study by the University of Cambridge, the country accounts for over 4.6% of the world’s hashrate.
According to the Financial Tribune, mining companies in Iran were granted 50 permits, but at the end of June the Ministry of Industry, Mining and Trade counted 30 licensed crypto farms. That was after the ministry’s announcement in April that miners would pay 16,574 rials ($ 0.39) per kilowatt-hour, four times the original price, and some of them may have been forced to go underground or even do their business to give up. The largest licensed mining facility in Iran in the city of Rafsanjan is owned and operated by China.
The energy-intensive minting of digital currencies was cited as a major cause of power shortages and blackouts across the country this summer, with record temperatures significantly increasing electricity demand. In May, the government in Tehran announced that it would shut down even licensed miners during peak consumption times. Meanwhile, Tavanir has tracked illegal mining operations and has confiscated over 200,000 units of hardware in the past few months. The devices were estimated to have consumed 750 megawatts of electricity, the equivalent of five provinces total, according to the utility.
Do you expect many Chinese miners to relocate to Iran following the recent statements and actions by the Iranian authorities? Let us know in the comment section below.
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