Iranian Govt. Legitimizes Crypto Mining, Will Use Tax Revenue To Mitigate The Effects Of US Sanctions
- The Iranian government authorized cryptocurrency mining as industrial activity in a Sunday cabinet session chaired by President Hassan Rouhani
- Crypto mining revenue to be used to mitigate the effects of US sanctions
Those involved in crypto mining, according to the report will be required to acquire a license from the Ministry of Industry, Mine and Trade.
Despite the authorization, the government remains firm that digital money should not be allowed in domestic transactions.
Moreover, those who use cryptocurrencies should bear the risks associated with it as the government and the local banking system won’t be providing any guarantees for them.
Using Crypto Mining Revenue To Mitigate The Effects Of US Sanctions
Crypto mining, like any industrial activity, is also taxable unless “individuals export cryptocurrencies and bring back the revenues to the country.”
The news agency claims that this is deemed as the first step to legalize cryptocurrencies in Iran. it further reported that experts believe cryptocurrencies can be used to mitigate the effects of “harsh economic sanctions” imposed by the US on Iran.
The plan to authorize crypto mining in the country emerged earlier this year when the governor of the Central Bank of Iran, Abdolnaser Hemmati shared that the Economic Commission had approved the idea and would put it for discussion by the Cabinet.
At that time, Himmat’s statement reflected that in order to take advantage of tax and customs revenues from the crypto industry, the Commission has been interested in recognizing it as an official industry.
“The gained income can be used for purchasing foreign exchanges under US sanctions to remove the difficulties we are faced with,”
Elyas Hazrati, head of the economic commission of Iranian Parliament told Mehr News Agency last week.
Low Electricity Driving The Demand Of Crypto Mining
The primary reason behind the growing popularity of cryptocurrency mining in the country is the low cost of electricity, currently at 2 cents. The government is yet to approve the final price rate for miners and is now likely to set the exported rate for mining farms.
There have also been reports of Chinese wanting to establish crypto mining arms in Iranian free zones.
Iran’s electrical Industry Syndicate recently revealed its intention to increase the electricity prices to 7 cents per kilowatt for crypto miners.
Officials continue to debate how to deal with this increasing popularity, with one minister remarking that Iran has become “a heaven for miners.”
Earlier this summer, the authorities confiscated about 1,000 units of mining machines and cut off power to miners as well.
Iran is also working on its own digital currency. Earlier this month, an official from the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) informed that a central bank indigenized digital currency is to be unveiled.