Recent reports indicate that the Iranian government has formally recognized cryptocurrency mining as an industrial activity. Mehr News Agency This shift in policy was reportedly made during a cabinet meeting on Sunday, overseen by Iran's President, Hassan Rouhani.
Moving forward, those interested in mining will need to obtain approval from Iran's Ministry of Industry, Mines, and Trade.
It's important to note, though, that while crypto mining is now a formal activity, it's taxable unless the earned cryptocurrency is sent abroad and the funds are used to boost Iran's economy.
Despite the changes in mining policy, cryptocurrencies themselves remain illegal in Iran and can't be used for payment or exchange purposes.
The Iranian government, despite its pro-mining stance, continues to alert citizens about potential financial dangers associated with engaging in cryptocurrency activities, reminding them that banks won't offer protection against any losses.
The approval by the Iranian cabinet was a follow-up to an earlier green light for mining given by a governmental committee. revealed During a discussion on July 21, the governor of the Central Bank of Iran, Abdolnaser Hemmati, mentioned that the economic commission had approved a strategy for digital coin mining, waiting for further cabinet discussions.
According to a Mehr News update, validating the mining sector is seen as a promising step by cryptocurrency experts and may lead towards broader crypto legalization in Iran.
Crypto Mining Is Iran’s Weapon
With a few more supportive changes, Iran could evolve into a significant hub for crypto exchanges, aided by its advantageous conditions for mining.
The mining industry has offered Iran strategic options to mitigate the economic challenges presented by U.S. sanctions. crippling economic With affordable electricity being one of Iran's strengths for mining, the country aims to use this resource wisely to bolster its economy, as it's known for having one of the lowest global mining costs due to energy subsidies.
In 2022, Iran spent around $45.1 billion subsidizing its power sector, accounting for roughly 10% of its economy.
In 2017 alone, the country had to spend During March of 2023, electricity costs in Iran were notably low, at $0.03 per kWh, a fraction of the global average at the time. annual GDP for that year. Per Global Petrol Prices These low rates have drawn miners from various countries like China to Iran, though future increases are expected now that mining is more regulated.
Mehr News Agency has reported a proposed increase to $0.07 per kWh specifically for crypto miners, which, while more than before, is still quite competitive.
We can take cues from Iran's adaptable approach to cryptocurrencies.
Iran's pivot towards recognizing mining as a valid economic activity provides lessons in how shifting perspectives can reshape industry roles and economic potential.
With the intention to eventually phase out subsidies for mining operations, the Iranian government once criticized the sector for its environmental impact.
In June, the Iranian Energy Minister called Fast-forward to July, and there’s a more cooperative relationship, symbolically with officials supportive of this shift.
It's still to be determined if the U.S. will respond with additional sanctions against Iran's mining boost.
Now, U.S. policy strategists must address a more empowered Iran, fortified by its mining activities.
