In Iran, the Ministry of Industry has granted more than 1,000 cryptocurrency mining licenses.
This was revealed in a news story recently published in the Financial Tribune, the first English-language Iranian economic newspaper.
The confirmation comes from an official of Iran’s ICT Guild Organization, an NGO representing the ICT sector in the country, which has revealed that the licenses were issued by the Iranian Ministry of Industry, Mining and Trade.
The official, Amir Hossein Saeedi Naeini, also stated:
“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”.
Iran legalized cryptocurrency mining back in 2018, and it was for a long time an attractive location for miners because of the low cost of electricity: $0.11 per kilowatt-hour (kWh).
However, during the summer, costs rose to $0.46 per kWh, making mining in the Middle Eastern country less profitable.
As a result, despite the thousands of authorized plants, only a part of them would be actually used to mine cryptocurrencies.
It should be noted, however, that the consumption of electricity for mining, in an oil-rich country like Iran, is partly subsidized by the state, with a 20% discount guaranteed to miners.
The curious thing is that the Iranian State does not welcome the use of cryptocurrencies, to the point that it has not yet recognized them as a means of payment. Furthermore, mining has caused a 7% increase in electricity consumption in the country, leading to a ban on mining during peak energy consumption hours, and a double tariff is applied during the months of higher electricity consumption, in summer.
On the one hand, the value of cryptocurrencies is acknowledged, while on the other, their use is limited, which seems to suggest that the decision to restrict their use is more political rather than technical, and could eventually be dropped.