Iran has banned the power-intensive mining of cryptocurrencies like bitcoin ahead of its peak electricity demand season, after soaring consumption contributed to blackouts in major cities.

The ban is effective immediately and will last until 22 September, President Hassan Rouhani said on state TV on Wednesday, adding that around 85% of current cryptocurrency mining activity in the country was unlicensed.

The move could risk pushing the licensed minority into the black market, which authorities have also been trying to crack down on, even enlisting spies to locate illegal miners who hide computers everywhere from homes to mosques.

Subsidised power prices and economic sanctions that limit access to foreign currency have made Iran a major base for cryptocurrency mining, according to analytics firm Elliptic, which estimates the country is home to 4.5% of all bitcoin mining in the world.

Officials blame the crypto rush, increased manufacturing and a drought that’s cut hydroelectricity generation for blackouts that are playing havoc with businesses and daily life in Iran.

The country is in negotiations with the US and other world powers to revive the 2015 nuclear deal, which would ease sanctions and allow foreign companies to provide much-needed infrastructure investment.  — Reported by Patrick Sykes, (c) 2021 Bloomberg LP