Iran is Looking to Allow Regulated Cryptocurrency Mining
Abdol Nasser Hemmati, the governor of the Central Bank of Iran has announced that the government is working on a framework that will allow regulated cryptocurrency mining.
According to the official, lawmakers are drafting policies that will require miners to pay for electricity at export rates. He has also mentioned that it’s in the government’s interest to have mined digital currencies channeled back into the Iranian economy.
The move will pressure mining enterprises into making a positive contribution to the economy which has been battered by a wave of crippling sanctions imposed by the Trump administration.
Hemmati has, however, warned that mining of cryptocurrencies whose value is tethered to that of the national currency, the rial, or assets such as gold will be barred. Iran is currently experiencing an incursion of miners looking to take advantage of its cut-rate electricity fees.
The low cost of power in the country is as a result of extensive government subsidies and expansive oil reserves. The Iranian administration spends over $40 billion a year on energy subsidies alone and has vast oil reservoirs second only to Venezuela.
These two factors have pushed down energy consumption costs considerably. As a result, the average rate per kilowatt hour in Iran is about $0.03, but it exports electricity to neighboring countries at a cost of about $0.8 kWh.
The Incursion of Miners Is Forcing the Government to Change Policies
Reports of miners flocking in from China, Spain, Ukraine, France, and Armenia have been circulating since December last year when the crypto winter was setting in. Energy consumption has reportedly surged by over 6 percent as a result of mining activities.
As such, the government is taking the rise of mining-farms seriously and has apparently identified over 100 cryptocurrency mining-zones. It has threatened to cut off power supply and seek legal action against infringing entities.
The Iranian leadership has traditionally allowed some religious establishments such as mosques to use electricity for free but the mining mania has prompted the government to rethink this policy due to abuse.
Viral images of mining rigs installed in mosques and government buildings have triggered a re-examination of the free electricity policy.
Cryptocurrency Trading is Still Banned in Iran
There has been some policy incertitude in regard to the legality of crypto mining and trading in Iran. This is largely due to a flurry of contradictory remarks made by Iranian politicians.
Nasser Hakimi, the deputy governor for new technologies at the Central Bank has offered some clarification on this and emphasized that The Supreme Council on Countering Money Laundering clearly prohibits trading in digital currencies. He has underscored that crypto mining is still allowed.
(Featured Image via Pixabay)
Ethereum vs. EOS. In this comparison article, we examine blockchain's two largest decentralized app (dapp) platforms, giving...
Wondering if Celsius Network is a legitimate way to earn passive income on your crypto? We've got...
This week in crypto: Nevada immortalizes marriage, European regulators seek clarity, and NASA turns to blockchain. Read...
Jodie Gunzberg brings her experiences at the S&P Dow Jones, Morgan Stanley, and Graystone to the crypto as Managing Director of Coindesk Indexes.
ABOUT THE AUTHOR
ABOUT THE AUTHOR
Elizabeth Gail is a crypto-enthusiast and blogger. Her specialties include cryptocurrency news writing and analysis. When not writing about crypto, she’s out taking part in humanitarian endeavors across the world. For any news tips or coverage, you can reach out and engage with her on Twitter at @Lizbarret001. You can also email her at [email protected]