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Iran’s Licensed Cryptocurrency Miners To Aid Imports

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Gone are the days when cryptocurrencies and especially Bitcoin was viewed as a mere darknet currency. The world seems to have realized the value of these assets and have become more accepting of the same. The Iranian government seems to be the latest country to exhibit its keenness towards crypto.

Bitcoin Miners To Facilitate Imports

The country’s Iranian Students’ News Agency [ISNA] recently reported that a new set of regulations pertaining to crypto were put into place in Iran. Individuals who engage in Bitcoin mining were required to fund imports. The central bank of the country would be taking over the operations of receiving and converting crypto in order to aid the imports of the country.

All the miners that are legally registered in the country were to abide by the latest regulation. Both the Central Bank of Iran [CBI] along with the Ministry of Energy had put forth this idea. As per the latest law, the miners of the Middle Eastern country would be obligated to sell the mined tokens to Iran’s central bank.

Furthermore, a limit is set for the mining processes. The report highlighted that the government would take into account the amount of subsidized energy used by a miner along with several other factors. An elaborate document on the instructions pertaining to this would shortly be presented by the Ministry of Energy.

Iran came out as a crypto-friendly country last year after its government legalized mining. Yet, certain laws proposed by the country makes it a rather tumultuous region to trade crypto.

Additionally, the fact that economically repressed countries steer towards crypto has been surfing the industry. Countries like Venezuela have been affirming the same by widely adopting crypto. Iran’s economy took a hard hit after the United States imposed sanctions on the country. The COVID-19 pandemic disrupted almost every market all over the globe, Iran wasn’t spared either. The latest inclination towards crypto could have been stimulated by the distress in Iran’s economy as well as the ever-rising value of the crypto industry.

Crypto Mining Operations in Iran extend to Electric Power Plants

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The Government of Iran has recently approved crypto mining operations by power plants in the country. According to reports, Mostafa Rajabi Mashhadi, who serves as Deputy Head of the Power Generation , Distribution and Transmission Company of the country, or Tavanir, has confirmed the approval as he addressed the IRNA on Monday 27 July.

Iran is setting up a Bitcoin mining hub after the country’s subsidized electricity consumption and now miners are setting up a camp. Mashhadi further outlined the regulations that power plants must adhere to in order to operate cryptocurrency mining operations in the Islamic country.

Power plants must comply with set crypto mining operations tariffs

According to Mashhadi, power plants are expected to apply for crypto mining licenses to run their operation. Licenses are to be given to individual power plants by the Ministry of Industry, Mine and Trade.

Power plants are also required to fully comply with set tariffs on electricity consumption as far as crypto mining is concerned. Recent data show just how cheap miners pay for electricity consumption in Iran where one kilowatt of electricity is charged for as low as $0.01 to $ 0.05. The rates are expected to quadruple during the summer season, a situation that forced Tavanir to announce that the Iranian government had decided to reduce up to 47% on all tariffs on the electricity consumption by miners more so during the high seasons.

Allegedly 14 cryptocurrency miners have recently obtained crypto mining licenses to operate in the country. Each of them will have an electrical capacity of 300 megawatts. It is also worth noting that more than 1,000 more licenses have already been issued with permits.

Mashhadi also urged the general public to report any illegal crypto mining operations to the authorities, promising that the government would provide a reward for their actions.

Iranian president proposes a Muslim digital currency

Iran’s commander in chief, Hassan Rouhani has rallied Muslim faithfuls to unite; and come up with their very own Muslim cryptocurrency. He has also voiced his support for a national crypto mining project that he believes will further propel the country to thrive economically amid the current U.S sanctions that face them.

Iran Currency Smuggling Laws to Restrict Cryptocurrency Exchanges

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The Iranian government has moved to make digital currency channels to markets more high-risk and bemusing than before. According to a local news outlet, ArzDigital, the Iranian legislators submitted a proposal to add cryptocurrencies to Iran Currency Smuggling laws and foreign fiat exchange regulations.

The aftermath of the potential inclusion of digital currencies; is that Iranian investors face a bigger threat of being indicted by local authorities or face sanctions from the Americans. The legislation would require cryptocurrency exchanges to secure a license from the Central Bank of Iran, and comply with legacy foreign currency exchange regulations.

Exchanges to adapt to fiat Iran Currency Smuggling laws

It is unclear how the current cryptocurrency exchanges would adapt blockchain technology to the Iran fiat norms. However, it is apparent that the Iran administration is seeking to get rid of  capital outflow through preventive justification to shut down or punish local cryptocurrency exchanges.

Nevertheless, the country’s market does not strictly consist of local, over the counter players. In contrast to forex exchanges, a number of cryptocurrency businesses operating in Iran are lawfully regulated in other nations. It is still not clear how the potential licensing system will apply to the decentralized ecosystem.

Outside pressure?

For instance, KingMoney and Ubyte are exchanges owned by an Iranian businessman,Reza Khelili Dylami, but regulated under Swedish regulations. These two exchanges have in the past been earmarked as scams due to ties with Iran. Although the exchanges are not licensed in Iran, they have been efficiently facilitating cross-border payments with Ubyte transacting over $13.8 million with native exchanges as per a Chainalysis report.

It’s still blurry whether Trump’s government is pressurizing Iran in order to avoid international trade sanctions. However, it’s not clear how exchanges would circumvent sanctions in future; if they are registered and monitored by the Central Bank of Iran.

Iran Issues 1,000 Licenses To Crypto Miners

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As per sources, the government of Iran has allowed licenses to over 1,000 cryptocurrency mining entities. These licenses are issued by the Iranian Ministry of Industry, Mining, and Trade. This decision has given benefits to large firms established in the country. On the contrary, many small investors are away from the project due to higher electricity taxes which have proved to impede them.

 In an interview with IBENA news agency, an official with ICT Guild Organization of Iran said that the industry of cryptocurrency mining is new and has attracted many people in Iran towards itself. Amir Hossein Saeedi Naeini stated that:

 “The Ministry of Industry, Mine and Trade has issued more than 1,000 licenses for cryptocurrency mining in the country.”

 Saeedi Naeini further added that Iran’s researches show that the crypto mining industry can generate $8.5 billion for the economy.

 Electricity Costs – A Leading Impediment

 As the country is grappling with economic problems and the U.S. has sanctioned, Saeed Naeini believes this decision will help improve Iran’s economy. However, he discussed that the electricity cost is a leading impediment for the miners in the country. Moreover, a high number of large mines have been established. To the news agency, he said:

“High electricity tariffs plus stringent regulations have made the sector less appealing for small investors.”

 He said that the industry’s operating conditions should be in a position so that everyone, from large to small firms, can enter in it. Further, he emphasized that modification in electricity costs and terms could help boost the cryptocurrency mining industry and can generate a significant amount of revenue.

 Cryptocurrency Mining Law of Iran

 The cryptocurrency mining industry of Iran is established last year and was officially recognized by the government of Iran. It is necessary that ahead of operations, crypto miners should have a license issued by the Ministry of Industry, Mine, and Trade.

 Furthermore, the decision of recognizing the industry faced severe criticism by several authorities in the government. The authorities accused crypto miners of consuming more electricity. Last year, in June, it was reported by the state’s television that the authorities had seized about 1,000 mining machines. These mining machines were seized in two deserted factories on the charge of consuming subsidized electricity of the government.

 However, the official Saeedi Naeini said to IBENA that debate is under discussion for creating a favorable environment for the cryptocurrency miners. 

Bitcoin Values Around $29500 in Iran Amidst Global Uncertainity

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It appears that the largest cryptocurrency, Bitcoin is scoring higher today. Notably, the most outspoken Bitcoin bull in the crypto space, Michael Novogratz believes bitcoin reacted to the global uncertainty.

Bitcoin Hits at over $29500 in Iran

At the time of reporting this, Bitcoin is soaring with more than 2.30 percent over the past 24Hrs. Owning the market capitalization of $134,023,152,967, Bitcoin is currently valued at $7388 against USD. Although the crowning cryptocurrency remained to see the all-time high (ATH) of this year, the billionaire co-founder of crypto merchant bank Galaxy Digital termed bitcoin as “Digital Gold”.

As the USA v/s Iran attack is on hype, it appears that the sale price of Bitcoin in Iran is soaring to a new high. As per the localbitcoins.com, one bitcoin is currently valued at approximately $29819.36 in Iran which is 938 million Iranian Rials. Noticeably, the current BTC price in Iran is 3X higher compared to its current value of $7388.

Bitcoin in Iran

Concerning this fact, Michael Novogratz tweeted as follows;

Iran has been one of the most potential markets for crypto trading platforms, especially due to the US sanctions issues that Iran is facing. While on one hand, bitcoin is on rising demand in Iran, on the other hand, the country’s top officials are discussing the plan to create a cryptocurrency for Muslim countries to cut their reliance on U.S. dollar. Iranian President Hassan Rouhani in Mid December stressed that the Muslim countries need to strengthen the financial and trade cooperation to confront the ‘Economic Hegemony’ of the United States.

“The Muslim world should be designing measures to save themselves from the domination of the United States dollar and the American financial regime,” said AP, Rouhani

As for Michael Novogratz, he also predicted that the value of Bitcoin will hit $12K in 2020. However, he isn’t alone bullishly betting high on the forthcoming price of bitcoin, other analysts and influencers are eyeing at the next big Bull Run this year.

However, only time answers to what extent the price predictions can turn out to be true.! Stay tuned with Tron Weekly Journal