The Gulf nation has issued some 1,000 crypto mining licenses to miners as studies from an information and communications technology (ICT) non-profit organization (NGO) suggests that cryptocurrency could pull billions of dollars into Iran’s economy.
Tehran Issues 1,000 Crypto Mining Licenses
According to Financial Tribune, over 1,000 cryptocurrency miners in Iran have been given the license to legally conduct the mining of digital currencies and virtual assets. The Gulf nation’s Ministry of Industry, Mine, and Trade is responsible for issuing the license to miners.
The ministry cited studies by the ICT Guild Organization – an NGO concerned with the ICT sector of the country. According to reports, the studies indicate that the country’s crypto mining industry has the potential to provide billions for Iran’s economy.
Amir Hossein Saeedi Naein, an official from the ICT Guild Organization, in an interview with IBENA news, cited the study’s findings concerning crypto mining and power regulations in the Gulf nation. A quote from the interviews says:
“Our studies show that the crypto mining industry has the potential to add $8.5 billion to the economy but high electricity tariffs plus stringent regulations have made the sector less appealing for small investors.”
Iran announced its official acknowledgment of the cryptocurrency mining industry back in July 2019. In the same month, the Gulf nation also announced that higher electricity tariffs would be introduced for crypto miners.
The country’s authorities argued that it had no choice but to increase electricity prices for crypto miners as it could no longer afford to provide subsidy due to stringent U.S. economic sanctions.
Legalizing Bitcoin Mining in Iran
Back in July 2019, Iran’s government announced the legitimization of Crypto mining in the country. The government stated that crypto miners are required to obtain a license from the Ministry of Industry, Mines, and Trade.
Also in July 2019, special electricity tariffs were created for crypto miners by Iran’s Economic Commission to lighten the burden miners were placing on the country’s national grid. Reports also indicate that 74% of crypto miners set up their mining farms in remote locations to utilize cheap, clean, and renewable energy.
Tehran’s Pivot Towards Digital Currencies
Cryptocurrency has seen a plethora of developments in Iran. Although the country has yet to fully accept and legalize virtual assets and digital currencies like Bitcoin (BTC), reports have shown crypto transactions dating as far back as 2013.
These transactions were noticed by the U.S. Financial Crimes Enforcement Network (FinCen) who claimed that Iran was facilitating BTC transactions worth $4 million per year as of 2013, per reports from Blockonomi.
FinCen eventually released a report in 2018 hinting that Iran would be next on the list of countries to face U.S. economic sanctions as the U.S. President Donald Trump aimed at re-distributing international sanctions.
Due to the impending sanctions from the U.S., Iran turned its sight towards crypto as a means to evade the embargo and provide revenue for its economy. The Gulf nation reportedly began considering BTC and other cryptocurrencies as a payment method for its tourism industry back in March 2019. Reports said the country was mulling over the benefits of adopting crypto payments to curb possible payment restrictions suffered by visitors.
Previously, the Central Bank of Iran announced its release of cryptocurrency regulations back in January 2019. The regulatory framework reportedly prohibited the use of crypto as a payment method within Iran’s borders but gave authorization to crypto exchanges, crypto wallets and initial coin offerings (ICOs).
The regulations also provided approval for crypto mining activities within the country. This eventually led to Iran becoming a hotbed for crypto mining activities.