The Iranian government has reportedly issued more than 1,000 licenses to cryptocurrency miners in the country ever since it started to regulate the industry last year. According to local media reports, the licenses the licenses were issued by the country’s Ministry of Industry, Mine, and Trade.
An official with Iran’s ICT Guild Organization – an Iranian NGO representing information and communications technology (ICT) sector – Amir Hossein Saeedi Naeini revealed the state of the country’s cryptocurrency mining industry, local Financial Tribune reported Friday.
In an interview with the Ibena publication, he stated that cryptocurrency mining is a new industry but miners have been attracted to it in Iran due to low electricity costs. According to data, miners are charged $0.11 for one kilowatt-hour (kWh) of energy, whilst during the peak summer season (June to September) the charges are higher at $0.46 per kWh.
Previously, the government accused crypto miners for using subsidized power after getting ahold of approximately 1,000 bitcoin mining machines in two abandoned factories allegedly using government-subsidized electricity.
Following that, the government issued a directive and is now providing electricity to them at the export rate, citing that subsidized energy put pressure on Iran’s national grid, causing a 7% increase in energy consumption in the country. This, in turn, significantly raised the operating cost of digital currency mining businesses in the country.
“The electricity price offered to miners will be equal to the average Rial price at which Iran exports its electricity to other nations, or to 70% of the average Rial price at which the country ships off its natural gas,” according to a directive from the government.
In the meantime, Amir Hossein Saeedi Naeini stated that studies have shown that the crypto mining industry had the potential to add $8.5 billion to the economy of the country. However, he further explained that the cost of electricity was a major challenge for crypto miners in Iran.
Whilst a number of large and industrial farming mines have already been set up, the high electricity tariffs plus stringent regulations have made the sector less appealing for small investors. As such, few licensed mining farms are currently active in Iran. He then suggested that making changes to the electricity rates could help boost the crypto mining industry by allowing all miners to operate, and it could also help generate more revenue.
Due to the criticism from the ICT Guild Organization regarding the high tariffs, the government has responded and stated that discussions are underway to set more favorable terms for crypto miners.
Meanwhile, the Iranian government officially recognized cryptocurrency mining as an industry only in August 2019 after months of deliberation. Notably, Iran does not recognize cryptocurrencies as legal tender. Iranian President Hassan Rouhani has also been discussing creating a unified cryptocurrency for Muslim countries with leaders of other Muslim nations.