Iran’s Government Officially Legitimizes Cryptocurrency Mining

Cryptocurrency mining in Iran is now legal, Mehr News Agency reports. This follows a Sunday decision by the country’s cabinet to authorize the mining of cryptocurrencies. Now classified as an industrial activity, cryptocurrency miners will be required to acquire licenses from Iran’s Ministry of Industry, Mines and Trade.

The green light from Iran’s cabinet comes about a week since a government committee gave its approval for cryptocurrency mining. This was revealed by the governor of the Central Bank of Iran, Abdolnaser Hemmati, on July 21:

“A mechanism to mine digital coins was approved by the government’s economic commission and will later be put to discussion at a cabinet meeting.”

Will Cryptocurrency miners now flock to Iran?

Iran currently has one of the cheapest countries in which to mine cryptocurrency. This is due to the giant subsidies granted to power generation. For instance, in 2017 Iran spent more than $45.1 billion on fossil energy consumption subsidies, per the International Energy Agency.

The low electricity prices have consequently attracted crypto miners from other parts of the world including China. However, they are unlikely to remain low as cryptocurrency miners are likely to be charged a higher rate than regular users. The new rates will still be comparatively low though. According to Mehr News Agency, the Iranian government intends to raise electricity prices for cryptocurrency miners to $0.07 per kWh. This is about the same rate as China, which is one of the globe’s cryptocurrency mining hotspots.

Per Global Petrol Prices, the cost of electricity per kilowatt hour in Iran as of March was $0.03 across the board. This was one of the lowest rates in the world, only rivaled by Burma and far lower than the global average at the time – $0.15 per kWh.

Will Bitcoin end the US dollar hegemony?

The regulation of the mining of Bitcoin and other cryptocurrencies comes at a time when crypto is being viewed as a solution to the debilitating economic sanctions that have been imposed on Iran by the U.S. Iran’s efforts in this regard have subsequently not gone unnoticed in the West.

Notable Bitcoin critic and New York Post columnist, John Crudele, recently stated that the cryptocurrency interest by countries such as Iran will let ‘rogue nations to get rogue-ier’ as he warned that ‘someday one of these countries will use cryptocurrencies to pay for attacks on the US’.

Despite the Iranian government’s friendly stance towards Bitcoin mining, the use of cryptocurrencies in conducting transactions and payments is prohibited in Iran.