Iran Could Earn Over $1 Billion in Bitcoin Mining Revenue Each Year

While Iran ’s regulatory relationship with Bitcoin has been on and off, a new report from blockchain analytics firm Elliptic suggests that regulated mining activities may have driven more than $1 billion in revenue and helped the country circumvent economic sanctions imposed by the United States.
An excerpt from the report published today states that research suggests Iran currently accounts for 4.5% of the total global Bitcoin mining operations, earning the country hundreds of billions of dollars, particularly used to circumvent the oil embargo.
“The United States has imposed a near-total economic embargo on Iran, including a ban on all Iranian imports and sanctions on Iranian financial institutions,” the report reads. “Over the past decade, oil exports have plunged 70 percent, plunging the country into a deep recession, spiking unemployment and a period of civil unrest.”
“Faced with these sanctions, Iran has turned to an unlikely solution — bitcoin mining.”
The report notes that cheap, abundant oil means energy-intensive mining operations are relatively cheap for Iran, and as a result, foreign investors are playing a key role in the country’s expanding cryptocurrency economy — sometimes with assistance from the Iranian military.
“A number of foreign companies have obtained mining licenses and established operations in the country. These companies are said to have good relations with ‘Iran’s military,’ and one particularly large mine in the Rafsanjan Special Economic Zone is said to have been established in cooperation with a ‘military organization,’” the report said.
Ultimately, the Bitcoin produced by these state-sanctioned mines can then be used to help the country sell its oil through a proxy: excess energy and oil are used to produce Bitcoin, which can then be sold on the global market.
The report also noted that this dynamic “has fully become an official policy.” In late April, Iran passed laws that would enable banking entities to purchase imported goods with cryptocurrencies, and then in May, the government appeared to attempt to tighten its control over cryptocurrencies, banning the use of foreign-mined BTC for imports.
Despite now appearing to be a key part of Iran’s global trade strategy, the official relationship with Bitcoin has not always been so rosy. In January, officials tried to blame widespread power outages on illegal mining operations (although experts say a decaying power grid is a more likely culprit), and earlier this morning reports emerged that the country is using its intelligence agencies to hunt down illegal mines. (Cointelegraph)