The Iranian government has issued licenses to more than 1,000 cryptocurrency mining farms since it started to regulate the industry last year.
Reported by local news agency Financial Tribune, the licenses were issued by the country’s Ministry of Industry, Mine, and Trade.
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Iran became one of the hotbeds of crypto mining due to low electricity costs. However, it also raised alarms among the government as it subsidizes electricity usage cost to the public.
However, despite banning the industry, the authorities of the country considered the economic benefits of the digital assets in a heavily sanctioned country and legitimized the crypto mining industry, mandating licensing. The step was taken after a crackdown on the industry, which resulted in the confiscation of thousands of illegal mining equipment.
Mentioning the potential of the digital asset sector, Amir Hossein Saeedi Naeini, an official with Iran’s ICT Guild Organization, told IBENA news: “Our studies show that the crypto mining industry has the potential to add $8.5 billion to the economy…but high electricity tariffs plus stringent regulations have made the sector less appealing for small investors.”
The government, however, scrapped subsidized electricity prices to the crypto mining firms and is now providing electricity to them at the export rate. This significantly raised the operating cost of digital currency mining businesses in the country.
“[While] a number of large and industrial farming mines have been set up…High electricity tariffs plus stringent regulations have made the sector less appealing for small investors,” Naeini added.
Sanctions – good news for crypto?
Following the recent US-Iran tensions and sanctions on Iran, the digital asset usage might ramp up. Even the crypto market is showing bullish signals which might be linked to the sanctions.
Naeini also hinted that the Iranian government might reconsider the electricity costs for crypto miners to give a boost to the sector.
“The operating conditions in this industry should not be such that only large capitalists enter the cryptocurrency mining market but that all miners can operate,” he added.