The Ministry of Industry, Mining and Trade has issued over 1000 Crypto Miners Licenses so far in Iran. A limited number of licensed mining companies are currently active across the country. According to an official, the crypto mining has the potential to add $ 8.5 billion to the economy. But high electricity tariffs and strict regulations have made the sector less attractive to small investors.
27 January, 2020 | AtoZ Markets – The crypto mining in Iran has proved extremely popular due to the country’s low electricity costs. However, it raised alarms among the government as it subsidises electricity usage cost to the public. In the latest development of Iran, it is trying to rein in rampant illegal mining.
Iran is Actively Issuing Crypto Miners Licenses
According to the local news agency Financial Tribune, The Iranian Ministry of Industry, Mining and Trade issued over 1000 licenses for cryptocurrency mining units. A limited number of licensed mining companies were active across the country.
However, despite the banning the industry, the country’s authorities considered the economic benefits of digital assets in a heavily sanctioned country. It legitimized the crypto-mining industry by requiring licensing. The move was taken after a crackdown on the industry which led to the confiscation of thousands of illegal mining equipment.
Amir Hossein Saeedi Naeini, an official of the ICT Guild Organization of Iran, in an interview with the IBENA news, said:
Many Iranians have been attracted to the crypto mining. The crypto mining has the potential to add $ 8.5 billion to the economy.
Iran legalized crypto mining last June. The country has long been attractive to miners due to cheap power. Miners are charged 4,800 Iranian rial (~ $ 0.11) for one kilowatt-hour (kWh) of energy. During the high summer season (June to September), however, the charges are higher at 19,300 Iranian rials (~ $ 0.46) per kWh.
Government Should Reconsider the Electricity Costs
Naeini said that most potential investors left for neighboring countries because they offered incentives for crypto mining. He suggested that Iran should be more favorable to smaller investors. Only large capitalists could enter the cryptocurrency mining market due to current high tariff rates and strict regulations. Naeini also suggested that the Iranian government could reconsider the electricity costs for crypto miners to boost the sector.
Iran finalized electricity tariffs in November. The subsidized energy previously put pressure on the Iranian national grid, causing a 7% increase in energy consumption in the country. In particular, Iran does not recognize cryptocurrencies as legal tender currency.
In other news, the ICT Guild Organization recently criticized the government for setting “irrationally high power rates” for licensed miners. ICT said that it was ruining the potentially profitable business. However, the Ministry of Energy replied that it had revised tariffs for authorized miners based on seasonal energy consumption patterns.
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