Following the legalization of mining, Iran intends to push the annual mining license

Following the legalization of digital currency mining activities, Iran has recently focused on the development of relevant regulations.

According to a draft proposal for a new Iranian cryptocurrency mining regulation obtained by Coindesk, registration and existing cryptocurrency mine owners are required to submit information, including a list of business activities, estimated investment value, current employment status, and mine lease agreement. , the value of the mining machine and the mining period; in addition, the license needs to be updated every year.

Sources from the capital Tehran said the draft is expected to pass official approval.

In the past two years, Iran’s cryptocurrency mining industry has grown rapidly, attracting overseas and local miners at very low cost (down to $0.006 per kWh), compared to hydropower stations in southwestern China. Electricity is usually about 0.15 yuan (about 0.02 US dollars per kWh) during the summer flood season. At the time of the freshwater period, electricity costs may reach $0.04 per kWh. The reason why the Iranian electricity price is so low is that the government subsidizes electricity.

According to market analysis company Gate Trade, there are very contradictions to more than 1,600 Iranian encryption users. At the end of June, the Iranian authorities confiscated about 1,000 bitcoin mining machines. Prior to this, the Iranian Ministry of Energy also announced that they plan to cut off the power supply suspected of using state subsidized electricity for encrypted mining operations.

But since July, the Iranian government has formally considered the legality of mining. On July 6, Iran’s Minister of Information and Communication Technology, Mohammad Javad Azari Jahromi, highlighted the potential of cryptocurrency mining and called for the formalization of Iran’s operations. On the 11th, Abdol Nasser Hemmati, President of the Central Bank of Iran, once said that the Iranian government is planning to authorize cryptocurrency mining, but there are two conditions: 1. Mining of international cryptocurrency should be based on the price of export electricity; 2. Mining The cryptocurrency should be fed back into the national economic cycle.

At the end of July, Iran finally recognized the grassroots industry and promised to adopt a legal licensing process. At a cabinet meeting chaired by President Hassan Rouhani, the Iranian government has approved encryption mining as an industrial activity and noted that the relevant personnel should obtain the necessary permits from the Ministry of Industry and Mines. According to the decision, the person using the cryptocurrency should be exposed to the risk, and the government and the banking system will not provide any guarantees. In addition, Iran’s mining license is only applicable to miners requiring 30 kW of equipment, which may exclude homemade mining equipment or Small work.

The decision also stated that digital currency is not allowed to be used in domestic transactions. As with other industrial activities, encryption mining should also be taxed unless the individual exports the cryptocurrency and brings the income back to the country. This is considered to be the first step in the legalization of Iranian cryptocurrency. Some experts believe that cryptocurrency can be used to mitigate the impact of the United States on severe economic sanctions against Iran.

Prior to this, the US Congress once tried to prevent Iran from getting involved in the field of cryptocurrency mining. Saeed Zarandi, assistant to the Minister of Industry and Supply and Supply of Iran, has publicly stated that the US Congress believes that cryptocurrency is a tool to evade sanctions and money laundering, and is therefore trying to pass legislation against Iran to obtain cryptocurrency.

On August 4th, the Iranian cabinet approved and announced a bill that denies the use of cryptocurrencies for trade activities in Iran while it is legal, further complementing the details of mining regulations. The bill stipulates that if miners are approved by the Iranian Ministry of Industry to allow digital currency mining in Iran under certain conditions, authorized mines should charge electricity or natural gas for electricity generation based on the price of Iranian energy exports; It is not possible to mine within 30 km of all provincial centres; if a foreigner wants to establish an underground mining site in a special economic zone, the Iranian Ministry of Industry will have the authority to delegate authority to the relevant departments of the Special Economic Zone.

Although the regulations are more stringent, the industry's voice is getting better. Sources from the local sources said he supported the move because it could lay the foundation for the sustainable development of the country's mining industry. For example, if there are too many miners in a region, the authorities can encourage miners to distribute operations throughout the region.

The second anonymous source said: "The Iranian power industry is not a private enterprise but a state-owned enterprise. The authorities need to find a way to balance the mining business without damaging the grid." He believes that although the regulations are mainly aimed at medium and large mine owners, He still does not believe that this legislation can completely curb the participation of small miners in the mining army. He believes that “there will be a large number of underground mining operations, and a large number of retail investors who are mining at home may have an impact on the grid.”

The third local source is optimistic that Iran will become one of the world's largest players in the bitcoin mining industry next year.

Original article, author: aloe;

Source: Planet Daily;

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