On July 28, the Iranian government officially gave authorization for crypto mining within the country. As a recognized industry, as long as businesses and miners receive the proper license from the Industry, Mine and Trade they are able to conduct operations.
According to the Iranian Chamber of Commerce, Industries, Mines and Agriculture, the government economic commission officially approved crypto mining. Now the government is looking for ways to be able to regulate the activity within its current legal structure.
In a statement, Abdolnaser Hemmati, Governor of the Central Bank of Iran, explained, “A mechanism to mine digital coins was approved by the government’s economic commission and will later be put to a discussion at a cabinet meeting.”
The authorization of cryptocurrency mining should help to boost the Iranian economy. Crypto mining has already become quite popular in the country but has been discouraged because of the large amounts of electricity that were needed to conduct mining operations. This led to the seizing of 1,000 machines that were used in mining operations early this month.
Explained Elyas Hazrat, head of the commission, in a statement made four days ago, “We do believe that the cryptocurrency industry should be recognized as an official industry in Iran, to let the country take advantage of its tax and customs revenues. By generating cheap electricity, we can provide the required power for digital money miners in the country. The gained income can be used for purchasing foreign exchanges under U.S. sanctions to remove the difficulties we are faced with.”
While crypto mining has been authorized, it is unclear at this point whether it will be acceptable for users to be able to use the digital coins for payments within Iran. Earlier this year the central bank had recommended barring the use of digital currencies for domestic payments, and it is not clear whether that recommendation will affect miners and those involved in the procurement of digital currencies.
However, this step is viewed as an important one in terms of legalizing cryptocurrencies within Iran. It is hoped that mining for such currencies will help to mitigate the harsh sanctions that have been imposed by the U.S. Because digital currencies do not require banks to be able to support exchanges or transactions, it bars countries like the America from being able to stop transactions from occurring internationally.
The real issue will be whether the country can afford the power costs associated with crypto mining. Earlier this month it seems that that was unlikely when it was disclosed that one crypto miner was using the same amount of power as 24 households. To combat these concerns, it is expected that the Iranian government will impose a cost of 7 cents per kilowatt-hour, exceeding the current rate that is charged of 2 cents for the same amount of service.
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