Govt. gives green light for cryptocurrency mining

July 29, 2019 - 21:5

TEHRAN – Iranian government, in a cabinet meeting on Sunday, approved cryptocurrency mining as an industrial activity, IRNA reported.

Based on the government’s directive in this regard, cryptocurrency miners should get necessary licenses from the Industry, Mining and Trade Ministry and all the risks regarding the usage or mining of such currencies is on the involved parties and not subject to government or banking system guarantees.

Using cryptocurrencies in domestic exchanges is also not permitted.

Also, mining cryptocurrencies, like any other industrial activities, will be subject to tax rules and miners can only be exempted from tax if they return part of their earned currencies into the country’s economic cycle.

Earlier this month, the government’s economic committee approved a mechanism for mining cryptocurrencies.

“The government’s economic committee has approved a mechanism for mining digital coins and it will later be put to discussion at a cabinet meeting,” the Governor of Central Bank of Iran (CBI) Abdolnaser Hemmati announced on July 21.

As reported, the committee also passed a proposal for applying export rates for the electricity used by the domestic miners.

According to Deputy Minister of Energy Homayun Haeri, “a plan to apply the exported electricity rate for mining farms was approved by the government’s economic committee and will soon be discussed and voted on by the cabinet.”

Iran has been recently wrestling with over consumption of electricity by cryptocurrency mining farms across the country as many have rushed to mine coins due to cheap electricity.

Mining cryptocurrencies is, in nature, a very energy-consuming process. Some scholars even believe that due to its exponential growth it might consume the world's entire electrical energy by 2020. 
In late June, Iranian Energy Ministry announced that due to bitcoin mining processes the country’s electricity consumption increased by seven-percent this summer.

Consequently, the ministry proposed that the costs of electricity for cryptocurrency miners should be determined based on electricity export rates.

Following the Energy Ministry, Iran’s Power Generation and Distribution Company (known as TAVANIR) also announced that using electricity for mining cryptocurrencies is illegal and those household or commercial subscribers that use electricity for such activities will be cut off from the national grid.

EF/MA

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