Iran is bringing back cryptocurrency mining, but China shows no signs of changing its mind
- The Iranian government would enable authorized
cryptocurrencyminers to resume their endeavours from September 22.
- The country had announced restrictive measures in May amid an increasing power deficit causing blackouts in many parts of the country.
- China, on the other hand, is decisively cracking down on mining and has no intention of rolling back its cryptocurrency ban.
- While Iran is endorsing Bitcoin for self-preservation, China is against decentralised systems to retain maximum control and exert dominance.
AdvertisementRegulations around cryptocurrency saw a lot of upheaval over the past one year world over. While China continues to maintain its strict anti-cryptocurrency stance, other countries — like Iran — are softening their stance.
According to Iran's state-owned company for power generation and distribution — Iran Power Generation, Distribution, and Transmission Company (Tavanir) — the ban on cryptocurrency mining will be lifted come September 22.
The Financial Tribune reports that the utility will start resupplying electricity to mining farms in a bid to collect what's touted as the world's newest financial assets — Bitcoin and other cryptocurrencies.
But, on the other side of the world, in China, the government has warned its local electricity manufacturers to keep from selling its spare capacity to Bitcoin miners, local or otherwise. The companies, located in the provinces where mining has been banned, have till August 24 to completely dismantle mining farms and move any leftover mining equipment out of the area.
Iran is rolling back its cryptocurrency mining ban
The county’s Ministry of Industries, Mining, and Trade is expected to give out an official diktat soon, reversing the restrictions applied on all miners in May. Simply put, Iran's national grid will again be fully available for mining cryptocurrencies, a unique initiative to reduce the country's dependence on the globalised US dollar and other fiat currencies.
Mostafa Rajabi Mashhadi, the spokesman of the nationalised energy company, explained that power consumption in the Islamic Republic is expected to decline in the coming months as the summer has ended.
The country was forced to take regressive steps like a blanket ban since its power deficit was acutely high in the hot month of May. This led to blackouts and load sheddings in multiple parts of the country. Since
While Iran endorses Bitcoin, China is sure it wants none of it.
China is confident it wants nothing to do with cryptocurrencies. At one point, Chinese mines powered nearly 80% of the global trade in cryptocurrencies despite a domestic trading ban since 2017. But all of it came to an abrupt end in May when Beijing swiftly asked provincial governments, regulators, and energy companies to stop supplying energy to mining farms. Miners had little option but to comply and find an alternative plan to keep their business going.
Gradually, all miners started migrating out of the country and found a new home in many parts of the US, Kazakhstan, Canada, and even Russia. A recent ruling by a northern Shandong province's high court said that the Chinese law does not protect cryptocurrencies, and the assets never had legal status. The verdict is a final nail in the coffin for cryptocurrencies in the country, and there's little hope of taking a step back.
Iran wants a dollar equivalent, China wants the yuan to be the dollar
Iran faces severe sanctions from the US and is restricted from directly transacting in the international market. This limits its exposure to the US dollar, which is often considered the de facto globalised currency for trade. Foreign exchange against other fiat currencies is significantly tricky, making it a challenging task to get imports, in turn limiting the scope of growth. This, in turn, makes cryptocurrency an attractive alternative for the country.
According to an Elliptic report, Iran contributes 4.5% of all total Bitcoin mining, raking in revenues of nearly $1 billion each year.
For China, the ambition is very different. It has always focused on a centrally backed digital currency (CBDC), and its e-yuan experiment is slowly expanding to more and more citizens. At the same time, the government has cracked down on private players in the payments industry, intending to gradually phase out closed ecosystems and creating a centrally controlled digital currency that can be leveraged at an international scale.
With its industrial influence rising in south-east Asia, Africa, and other developing markets, China aims to establish a dollar-equivalent at a global scale. Its idea is to dominate the global economy by getting the early-adopter advantage. At the same time, a central system gives it full authority over censorship, surveillance, and even the country's monetary policy.
AdvertisementThe two countries are in an entirely different scenario and trying to leverage the crypto boom in their favour.
For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.
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