1,000 Cryptocurrency Miners Given Permits

EghtesadOnline: The Ministry of Industries, Mining and Trade has issued 1,000 plus licenses for cryptocurrency mining units so far, an official with Iran’s ICT Guild Organization said.

News ID: ۷۴۹۵۲۹

25 January 2020

A limited number of authorized mining farms currently are active across the country, according to Financial Tribune.

"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," Amir Hossein Saiedi was quoted as saying by IBENA.

He noted that crypto mining in part address the country's challenges in attracting forex resources and conducting international trade.

"Most potential investors have left for neighboring countries, because they offer incentives for crypto miners," he said, "Rules and regulations need to be more supportive of smaller investors."

Electricity rates in Iran are among the lowest in the world -- 0.7 cent kilowatt-hour. This partly led to the sudden surge in crypto mining farms.

The ministry's concerns over possible power outage in summer and the indirect subsidies going into crypto mining, prompted the government to significantly raise power tariffs for crypto mining to 7 cents/kilowatt-hour.

The price is the same for electricity export and applies to both Iranian and non-Iranian miners.

Issue of High Tariffs

ICT Guild Organization recently criticized the government for setting “irrationally high power rates” for authorized miners, saying that the measure is killing the potentially profitable business.

Allowing miners to directly work with power plants, purchase their unneeded electricity in the non-summer months or selling the national grid spare electricity through the Energy Exchange are some of the perceived resolutions for tackling the concerns of the government and miners.

The Energy Ministry recently said that it had revised tariffs for authorized miners based on seasonal power consumption patterns. Miners are charged 4,800 rials for one kilowatt-hour – equal to half the electricity export rates in autumn, winter and spring.

However, billings are planned to be based on 19,300 rials/kw, twice the price for exported electricity during the peak summer seasons (June to September).