Sanctions-Hit Iran A ‘Heaven’ for Bitcoin Mining, Says Gov’t Official
Iranian authorities are wrestling with the rising number of citizens turning to Bitcoin mining and use as a means of coping with a sanctions-crippled economy.
Iran’s minister for information and communications technology, Mohammad Javad Azari Jahromi, told the Associated Press (AP) that the country has become “a heaven for miners,” according to a July 18 report. He noted:
“The business of ‘
mining’ is not forbidden in law but the government and the Central Bank have ordered the Customs Bureau to ban the import of [mining machines] until new regulations are introduced.”
In the wake of toughened U.S.-led sanctions, Tehran is now facing the specter of hyperinflation. Oil export revenues have tanked by almost 90%, new data reveals, unemployment is veering close to 20% and millions are working below national poverty-line estimates.
As AP reports, subsidized electricity rates — currently at half-a-cent per kilowatt — have fueled a thriving
crypto mining community, although this is now set to change. Police raids on mining farms are being televised to disincentivize citizens and Iran’s Electrical Industry Syndicate has revealed its intention to hike up electricity prices to 7 cents per kilowatt.
Beyond mining, cryptocurrencies have made national headlines due to authorities’ concern that locals could be using them to convert the rapidly devaluing rial into other currencies.
In 2018, the head of the Iranian parliament’s economic commission, Mohammad Reza Pour-Ebrahimi, revealed that roughly $2.5 billion had been funnelled out of Iran via crypto — yet the matter has not been publicly raised since.
Even as the U.S. purportedly attempts to muscle in on Iranians’ mining and use of crypto to bypass sanctions, local officials have underplayed its systemic importance. Jahromi remarked:
“Cybercurrencies are effective in bypassing sanctions when it comes to small transactions, but we do not see any special impact in them as far as mega-transactions are concerned. We cannot use them to go around international monetary mechanisms.”