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iran cryptocurrency mining

Iran confiscates 7,000 Bitcoin miners operating illegally

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Iranian authorities have reportedly confiscated 7,000 Bitcoin [BTC] mining machines that were functioning illegally in the country. According to the state media, this happened to be Iran’s largest seizure of cryptocurrency mining machines to date. The machines were found in a deserted factory west of the capital Tehran.

This comes in the backdrop of Bitcoin’s hash rate taking a massive hit, an event that was spurred by a 90% shut down in China’s cryptocurrency mining space, after years of extravagant mining.

Iran’s Cryptocurrency Mining Environment

Iran considers cryptocurrency mining as an authorized activity provided the miners acquire a license from the country’s Ministry of Industry, Mine, and Trade. The country provides cheap power but the miners are required to sell their Bitcoins to the central bank. Tehran also enables cryptocurrencies mined in the country to be used to compensate for imports of authorized goods. These moves by lawmakers have managed to attract miners of late.

Even with these provisions, the authorities claim that many miners flout the rules and keep operating in the country without obtaining a proper license.

Interestingly, the latest news comes a month after the western Asian country had announced banning all cryptocurrency mining rigs, including the legal ones, until the end of the sixth Iranian calendar month on the 22nd of September amidst widespread power outages across the country.

During this time, President Rouhana had also claimed that 85% of crypto mining in the country was operating illegally and unlicensed. Since then, the authorities have been on the lookout.

Besides, a recent study by blockchain analytics company, Elliptic revealed that nearly 4.5% of all BTC mining takes place in Iran and the country is using cryptocurrency to dodge sanctions imposed by other countries. In addition to that, Elliptic also disclosed that crypto mining needed the equivalent of around 10 million barrels of crude oil a year, or 4% of total Iranian oil exports in 2020.

Iran’s Licensed Cryptocurrency Miners To Aid Imports

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Gone are the days when cryptocurrencies and especially Bitcoin was viewed as a mere darknet currency. The world seems to have realized the value of these assets and have become more accepting of the same. The Iranian government seems to be the latest country to exhibit its keenness towards crypto.

Bitcoin Miners To Facilitate Imports

The country’s Iranian Students’ News Agency [ISNA] recently reported that a new set of regulations pertaining to crypto were put into place in Iran. Individuals who engage in Bitcoin mining were required to fund imports. The central bank of the country would be taking over the operations of receiving and converting crypto in order to aid the imports of the country.

All the miners that are legally registered in the country were to abide by the latest regulation. Both the Central Bank of Iran [CBI] along with the Ministry of Energy had put forth this idea. As per the latest law, the miners of the Middle Eastern country would be obligated to sell the mined tokens to Iran’s central bank.

Furthermore, a limit is set for the mining processes. The report highlighted that the government would take into account the amount of subsidized energy used by a miner along with several other factors. An elaborate document on the instructions pertaining to this would shortly be presented by the Ministry of Energy.

Iran came out as a crypto-friendly country last year after its government legalized mining. Yet, certain laws proposed by the country makes it a rather tumultuous region to trade crypto.

Additionally, the fact that economically repressed countries steer towards crypto has been surfing the industry. Countries like Venezuela have been affirming the same by widely adopting crypto. Iran’s economy took a hard hit after the United States imposed sanctions on the country. The COVID-19 pandemic disrupted almost every market all over the globe, Iran wasn’t spared either. The latest inclination towards crypto could have been stimulated by the distress in Iran’s economy as well as the ever-rising value of the crypto industry.

Crypto Mining Operations in Iran extend to Electric Power Plants

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The Government of Iran has recently approved crypto mining operations by power plants in the country. According to reports, Mostafa Rajabi Mashhadi, who serves as Deputy Head of the Power Generation , Distribution and Transmission Company of the country, or Tavanir, has confirmed the approval as he addressed the IRNA on Monday 27 July.

Iran is setting up a Bitcoin mining hub after the country’s subsidized electricity consumption and now miners are setting up a camp. Mashhadi further outlined the regulations that power plants must adhere to in order to operate cryptocurrency mining operations in the Islamic country.

Power plants must comply with set crypto mining operations tariffs

According to Mashhadi, power plants are expected to apply for crypto mining licenses to run their operation. Licenses are to be given to individual power plants by the Ministry of Industry, Mine and Trade.

Power plants are also required to fully comply with set tariffs on electricity consumption as far as crypto mining is concerned. Recent data show just how cheap miners pay for electricity consumption in Iran where one kilowatt of electricity is charged for as low as $0.01 to $ 0.05. The rates are expected to quadruple during the summer season, a situation that forced Tavanir to announce that the Iranian government had decided to reduce up to 47% on all tariffs on the electricity consumption by miners more so during the high seasons.

Allegedly 14 cryptocurrency miners have recently obtained crypto mining licenses to operate in the country. Each of them will have an electrical capacity of 300 megawatts. It is also worth noting that more than 1,000 more licenses have already been issued with permits.

Mashhadi also urged the general public to report any illegal crypto mining operations to the authorities, promising that the government would provide a reward for their actions.

Iranian president proposes a Muslim digital currency

Iran’s commander in chief, Hassan Rouhani has rallied Muslim faithfuls to unite; and come up with their very own Muslim cryptocurrency. He has also voiced his support for a national crypto mining project that he believes will further propel the country to thrive economically amid the current U.S sanctions that face them.