Cryptominers Active in Free Zones

EghtesadOnline: Twelve cryptomining farms are operating in Iran's free trade and special economic zones, says an official with the High Council of Free Zones and Special Economic Zones.

News ID: ۷۸۶۲۵۴

14 March 2021

"Miners are allowed to consume excess output of power grids in free zones and special economic zones," IRNA quoted Elham Sakhaei as saying.

"As per rules power generated in the FTZs cannot be used in the mainland, nor can it be traded. Therefore, the excess output from plants can be used for cryptomining.”

Crypto farms are active in Kish Island, Maku and Aras free trade zones as well as Payam Special Economic Zone in Alborz Province, Shiraz Boushehr and Rafsanjan special economic zones, Sakhaei said.

"Starting business is considerably easier in the FTZs and SEZs. This along with other incentives has attracted miners," she added. It was not clear what the incentives are.

However, investors must first get a license from the Ministry of Industries, Mining and Trade, she said, adding that foreign investors have also applied for mining business in the zones.

While mining cryptocurrency is accepted by the government as legal, there are increasing numbers of illegal miners using  highly subsidized electricity because they have to pay much higher tariffs if they operate with a permit.

In July 2019 the government said it would recognize crypto mining as a legal industry. This was first welcomed by miners, but later they claimed that the electricity tariffs were too high and went underground with their business to deceive the utilities.

The Energy Ministry said electricity bills for miners will be based on average power export rates. As per earlier announcements, miners are charged 4,800 rials for one kilowatt-hour that is half the electricity export rate in autumn, winter and spring.

However, billings are planned to be based on 19,300 rials/kw, twice the price for exported electricity in summer (June to Sept). So far 24 cryptomining units using 310 MW have permission to operate.

The sharp increase in the price of cryptocurrencies in recent months has apparently made mining more tempting to Iranians and foreigners.

New Record

Bitcoin prices ascended to a record high Saturday, vaulting over a psychological milestone at $60,000, a move that may reaffirm to bullish crypto-asset investors that the path forward for digital assets is higher, newswires reported.

Early Saturday BTCUSD was trading at $59,781, after hitting a fresh all-time high at $60,322.60, according to CoinDesk.

The new mark for the world’s most popular crypto comes after a relatively fallow period for the asset whose gains have been attributed to greater adoption by a clutch of prominent institutional investors.

The jump above $60,000 also means that bitcoin has taken less than a month to traverse another $10,000 milestone, after hitting $50,000 back in mid-February.

Bitcoin broke the $20,000 barrier, one that it hadn’t come close to since December of 2017, less than three months ago.

Last December, the judiciary in Tehran reported a jump in court cases related to illegal cryptomining calling for stringent measures to restrict subsidized electricity for cryptomining.

Average daily crypto transactions in Iran is estimated at $10 million to $40 million. The government has been recommended to use cryptocurrency to help pay for imports disrupted by the 2018 US economic blockade. But the Central Bank of Iran says “cryptocurrencies have no significant role in Iran’s economy and made no contribution to bypassing the sanctions.”