Facing a severe energy shortage, Iran is increasingly critical of cryptocurrency mining, blaming it for exacerbating the nation’s power problems. While the country previously offered low-cost electricity to crypto miners, the government is now under pressure to curb energy consumption from high-powered activities. This comes as intense heat waves and growing electricity demands push Iran’s national power grid to its limit [1]. Officials are considering shifting policies to prioritize essential services over the energy-intensive crypto industry [2].
A prolonged and devastating drought has made the energy situation even worse. Water sources have dwindled, leading to the near disappearance of Lake Urmia, formerly the world’s second-largest saltwater lake. Experts predict nearby communities could completely dry out by the end of the summer, with temperatures reaching 40°C in some areas [2]. In response, citizens have protested in cities like Babolsar and Khomam, demanding better electricity and water access. Protesters have voiced strong criticisms of government mismanagement, chanting slogans calling for essential resources and condemning governmental failures [2].
The Islamic Revolutionary Guard Corps (IRGC) has also faced criticism, accused of using the national power grid for crypto mining to bypass international sanctions. Reports indicate that up to 5% of Iran’s electricity supply may be used by the IRGC for these purposes [2]. Meanwhile, everyday Iranians are suffering the consequences, with hospitals experiencing multi-day power outages, forcing staff to use manual fans in critical patient care areas like chemotherapy wards [2].
The Iranian energy sector is further strained by the need to reallocate power to crucial services. Tavanir, the national grid operator, has been forced to suspend electricity exports to neighboring Iraq due to increasing domestic demands. The government’s previous reliance on crypto mining for generating foreign currency has now become a burden, with energy experts warning that Iran’s outdated infrastructure is struggling to meet fundamental needs [1].
Iranian President Masoud Pezeshkian has described the situation as a “serious and unimaginable crisis,” dismissing outside commentary, including suggestions from Israeli officials for Iranians to protest against the government, as irrelevant [2]. He emphasized the internal nature of the challenges facing the nation.
Analysts suggest that the government’s crackdown on crypto mining is part of a broader plan to shift from widespread energy subsidies to more targeted economic assistance. However, the effectiveness of these measures is uncertain, and the long-term viability of the crypto industry in Iran is now questionable [3]. Restricting access to affordable electricity for mining could negatively impact the sector’s profitability and the government’s revenue from international crypto markets [1].
As the energy crisis intensifies, Iranian policymakers are grappling with balancing economic strategies and energy security. The future of crypto mining in Iran hinges on the government’s ability to reallocate resources effectively without causing further public unrest or economic decline.
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Sources:
[1] title1………………………..(https://www.mitrade.com/insights/news/live-news/article-3-1045156-20250816)
[2] title2………………………..(https://www.intellinews.com/gulf-region-sees-temperatures-spike-above-52-c-125-6-f-as-electricity-grids-buckle-396307/)
[3] title3………………………..(https://www.phenomenalworld.org/all-articles/)