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Power plants in Iran can mine Bitcoin (BTC) but they do not have access to the subsidized fuel in this case.
The government in Iran has permitted power plants to mining Bitcoin (BTC) and other cryptocurrencies. The approval comes with a twist. The power plants that want to mine Bitcoin in Iran cannot take advantage of government subsidies in the process. Mostafa Rajabi, a spokesman at Tavanir, indicated this in a statement.
Iran’s Ministry of Industries, Mining, and Trade had in January granted licenses to 1,000 cryptocurrency mining operators. The Iranians had approved cryptocurrency mining as industrial activity in July 2019. A spokesman has said that there are 14 requests for power by cryptocurrency miners. The requests amount to 300 MW. This is equivalent to the power needs of 3 Iranian provinces.
Iran has several reasons for its recognition of Bitcoin and cryptocurrencies mining as an economic activity.
The frosty relationship with the U.S. is one of them. Since President Donald Trump took office, sanctions have hit the Iranian economy hard. It has led to the consideration of various ways and means to bypass them. Cryptocurrencies offer the Iranians an opportunity to wiggle through the sanctions.
Power Plants That Mine Bitcoin in Iran Can Aid National Economy
Iran’s economy is also in turmoil. The Iranians can do with anything that adds value to the economy. Cryptocurrency mining (if it is legal) does this. Iran’s energy costs are way cheaper than most. It gives them a strategic advantage. It also means that there would be those who mine the cryptocurrency illegally.
As such, the consequences of illegal mining are still in effect. One method that the Iranians are employing in enforcement is its whistleblower policy.
Those who report illegal cryptocurrency mining activities receive rewards. Such rewards can reach up to 100 million Reals. It also aids the government’s regulation of cryptocurrencies. This move gives the government the power to keep miners in check using self-regulation.
The Iranians have scarce economic resources. Especially at this time when the world is teetering on the edge of a recession. Oil prices are unsteady.
The country has to find ways and means to survive the current economic crunch. In creating savings in subsidies and generating revenue, this activity will give them the best of both worlds.
Rajabi Mashhadi said:
“Where the supply of electricity is of great importance to the public, we will not allow those who misuse the tariffs provided for the agricultural and industrial sectors to produce bitcoins that are worth more than nine thousand dollars.”
It also brings forward another mechanism of making gains for countries.
Iran has a price advantage as per power prices. Its energy costs are tied to oil prices in the Middle East. The great thing is that petroleum products are in plentiful supply. It brings that strategic advantage to the table for other Middle-Eastern countries as well.
It is too early to tell if they will copy the Iranians.