Iran Licenses Crypto Mining as Industrial Activity

The country is one of the hotspots for rapid cryptocurrency adoption, triggered by uncontrollable inflation.

For Iranian cryptocurrency miners, a registration regime is now in place. The Iranian government has decided to license and legalize mining as an industrial activity, reported the MNA news agency. From now on, mining activity will be registered under the rules of the Ministry of Industry, Mining and Trade.

Using Bitcoin (BTC) is still banned on the internal market. Iran has stipulated no one can receive compensation for losses incurred in using BTC.

The news of newly legalized mining arrives about a month after Iranian authorities seized hundreds of mining rigs. The state’s electricity company noticed a 7% spike in electricity consumption in June, at a time of near-peak BTC prices, which easily vaulted the $13,000 mark. Two mining farms were affected, having lost their hardware for overloading the electricity network. But the new approach may register mining and make it more predictable.

Bitcoin remains the most heavily mined network, with a new inflow of machines after Bitmain started shipping the latest rigs.

Inflation and a relatively low exchange rate for the Iranian rial mean competitive mining prices based on electricity costs. The case of Iran is similar to that of Venezuela, where cheap electricity prices meant that even in a crisis, mining continued.

Currently, with prices even at $9,500, BTC mining is way above breakeven and is as active as ever, near its peak levels around 72-73 EH/s. Most mining activity is still based on Chinese mining farms. Still, smaller miners that have joined a pool could receive adequate rewards.

In the past decade, the rial has been sliding against the US dollar, losing more than 75% of its value. This loss coincided with the advent of BTC and the spike to extreme valuations. In Iran, there are six operational Bitcoin nodes, showing a mid-range level of interest within the country. It is difficult to estimate the location and power of separate local miners.