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Iran’s Government Greenlights Crypto Mining For Power Plants

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Iranians Blocked from Buying Bitcoins - Claims US Sanctions to Blame
Iranians Blocked from Buying Bitcoins - Claims US Sanctions to Blame

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Iran has made a rather interesting announcement, as of late. The country has notified the public that it will now allow for industrial-scale power plants within the country to operate Bitcoin miners. However, there’s a key stipulation in this: These power plants are not allowed to use subsidized fuel to facilitate mining.

Power Plants Authorized TO Mine Crypto

The Islamic Republic News Agency (IRNA) reported on this matter, as well, on the 27th of July, 2020. Mostafa Rajabi Mashadi stands as a Deputy Managing Director of Iran’s Power Generation, Transmission and Distribution Management Company, Tavanir. Mashadi gave a statement to IRNA, explaining that power plants across the country are now legally capable of operating Bitcoin mines within the power plant, as well. This comes with a few stipulations, however, being that they need the applicable licenses for it, and that they comply with the approved tariffs for it.

Mashadi further highlighted the fact that power plants will not be allowed to use subsidized fuel to facilitate the crypto mining, as well.

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Prioritizing Public Use Over Crypto Mining

The spokesman explained that electricity is something Iran wants its supply prioritized for the public. As such, Mashadi stated that Iran’s government would not tolerate the exploitation of state tariffs in order to produce Bitcoin. These tariffs are provided for industrial and agriculture sectors, and not for the explicit goal of mining Bitcoin when it’s worth more than $9,000.

It was back in January with Iran had its Ministry of Industries, Mining, and Trade issue out 1,000 crypto mining licenses. This has been ongoing since the country’s government gave its authorization to see crypto mining as an approved industrial activity, having done this back in July of 2019.

The massive Demands Of Crypto Mining

IRNA had a spokesman for the Iranian electrical industry tell the news publication about 14 crypto miners within Iran requesting more than 300 megawatts (MW) of power. To put it in perspective, this stands equal to the power usage of three provinces across the entirety of Iran.

The tariff scheme for crypto miners within Iran depends on several market factors. One of the most important factors is the price of fuel within the Middle East. Crypto mining is a very energy-demanding process, but the country’s electricity is much cheaper compared to the world at large. Mashadi gave an estimate in 2019, speculating that a single bitcoin would use only $1,400 in state subsidies.

With how profitable mining can be in the country, drastic measures had to be taken to ensure that illegal crypto mining operations can be stopped. The most prominent of which is a bounty program, allowing those that report it to receive a bounty of up to 100 million Rials, or about $2,375 in value.

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