According to reports, the Iranian government has issued more than 1,000 cryptocurrency mining licenses since it began regulating the cryptocurrency industry. Many large mines have been established in the country, but high electricity prices have discouraged many small investors.
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More than 1,000 licenses granted to miners
The Financial Tribune reported on Friday that Amir Hossein Saeedi Naeini, an official of the Iranian ICT Association, revealed the state of the country's cryptocurrency mining industry. In an interview with the Ibena publication, he said that cryptocurrency mining is an emerging industry, but Iran has attracted many people. He noted that miners need to obtain permits, and he shared:
"The Iranian Ministry of Industry, Mining and Trade has issued more than 1,000 cryptocurrency mining licenses in the country."
The official further stated: "Our research shows that the crypto mining industry has the potential to add $ 8.5 billion to the economy," the news outlet details.
Key challenge-electricity costs
Amir Hossein Saeedi Naeini believes that cryptocurrency mining has the potential to help Iran's economy improve. However, he explained that electricity bills are a major challenge for Iranian crypto miners. The official told the news media: "Although many large and industrial mines have been established, high electricity prices coupled with strict regulations have made the industry less attractive to small investors."
He believes that "the operating conditions of the industry should not allow only big capitalists to enter the cryptocurrency mining market and all miners can operate," he emphasized that modifying electricity prices and terms could promote the development of crypto mining and generate more revenue.
Iran's cryptocurrency mining law
Since last year, Iran's cryptocurrency mining has begun to be regulated. Aljazeera reported on August 4, 2019 that after several months of deliberations, the Iranian government officially recognized cryptocurrency mining in August.
The industry was recognized before government authorities cracked down on crypto miners accused of using subsidized electricity. In June last year, Iranian state television reported that authorities had seized about 1,000 bitcoin miners in two abandoned factories allegedly using government-subsidized electricity. A spokesman for the country's energy ministry said at the time that the miners were responsible for the country's 7% increase in energy consumption.
The news media explained that "the price of electricity provided to miners will be equal to the average rial price of Iran's electricity exported to other countries, or 70% of the average rial price of the country's natural gas transportation," in addition, the Iranian Cabinet Order Noting that “the use of electricity or natural gas for mining cryptocurrencies is prohibited during peak hours” and called on the ministry to set peak hours and install smart meter grids. In addition, the directive added: "It is forbidden to use household, agricultural or industrial grade electricity and natural gas, and once found, it will be subject to legal sanctions."
However, Amir Hossein Saeedi Naeini told Ibena that discussions are under way to set more favorable conditions for cryptominers. Meanwhile, Iranian President Hassan Rouhani has been discussing with other Muslim leaders about creating a unified cryptocurrency for Muslim countries.