Iran officially legalizes Bitcoin mining, low electricity prices may attract a large number of miners

On July 23, Iran has officially recognized cryptocurrency mining as a legal industry within its territory.

According to Iran’s Chamber of Commerce, Industry, Mines and Agriculture, the economic committee approved cryptocurrency mining on Sunday, and the Iranian government is now seeking ways to regulate the activity within its existing legal structure.

Abdolnaser Hemmati, governor of the Central Bank of Iran, said in a statement:

“The government’s economic committee approved a mechanism for digital currency mining, which will be discussed at a cabinet meeting later.”

Likewise, Homayun Haeri, deputy energy minister in charge of electricity and energy, said government ministers would vote on a measure to approve electricity prices for mining sites.

The Iranian government has previously been hesitant to approve mining, and just last month authorities seized and closed two mining farms.

Haeri has also said in the past that governments should not subsidize cryptocurrency mining.

However, Iran's electricity prices have been very cheap for a long time. At the same time, under sanctions, Iran's factories have closed down one after another, and electricity resources are even more surplus. Unlike China, Iran's power plants do not have a stable buyer like the State Grid. Many small power plants are facing a survival crisis at all times, and out of helplessness, they often quote extremely low electricity prices.

Compared with China's average electricity cost of 0.4 yuan per kilowatt-hour, Iran's electricity bill is "terribly" low.

Therefore, many Chinese miners will risk going to Iran to mine Bitcoin.

While cryptocurrency mining appears to have been given an initial green light in Iran, it is unclear whether officials would approve of people using cryptocurrencies as a means of payment.

Iran’s Central Bank reportedly proposed banning cryptocurrency payments in the country in late January, despite opposition from local industry stakeholders.