The Iranian cryptocurrency mining community has a reason to celebrate after the country’s Economic Commission finalized a report on electricity tariffs. The commission had set out to formulate new rules and payment plans for those conducting crypto mining activities.
However, as noted by the Iranian energy minister, Homayoon Ha’eri, before the new rates take effect, they require the approval of the Cabinet of Iran. Unfortunately, the minister did not reveal the details, only noting that they were formulated by taking into consideration the “current market factors such as fuel prices in the Persian Gulf.”
From $0.05 to $0.07 per kilowatt-hour
Previously, Ali Bakhshi, head, Iran Electrical Syndicate, indicated that a rate of $0.07 per kilowatt-hour was ideal for crypto miners in Iran. On the contrary, the rate is a bit higher than the normal rates in the country which stand at roughly $0.05 per kilowatt-hour. Industrial and agricultural sectors in the country enjoy an even lower rate.
The higher rates for crypto miners is backed by the fact that Bitcoin, among other cryptocurrencies using the Proof of Work algorithm, consumes more electrical power than a typical household not only in Iran but around the world.
For example, Mostafa Rajabi Mashhadi, spokesman, Iran Energy Ministry, power department, noted that mining one Bitcoin in Iran consumes state subsidies worth approximately $1,400. Additionally, mining a single Bitcoin consumes the same amount of electricity as consumed by 24 buildings in the country’s capital, Tehran, in 12 months.
Use electricity but don’t import crypto mining equipment
Contrastingly, Iran is yet to approve the importation of cryptocurrency mining equipment. According to Jamal Arounaghi, Deputy President, IRICA (Islamic Republic of Iran Customs Administration):
“If the government okays with importing devices for producing cryptocurrencies, IRICA will execute legal directives …even goods which are banned from being imported into the country have tariff line. For example, some psychotropic or psychedelic drugs have tariff line in IRICA.”
Fortunately, the Central Bank of Iran (CBI) previously noted that they are contemplating allowing the importation of crypto mining equipment. Alongside this, the Bank is also contemplating a Gold-backed national cryptocurrency.
It’s not illegal but the government must approve
However, even though the crypto mining activities are not explicitly prohibited in law, the Iranian Customs Bureau banned “the import of (mining machines) until new regulations are introduced.”
In the recent past, Iran has been battling cryptocurrency miners who have invaded the country due to the cheap government-subsidized electricity. For instance, in June, Iranian authorities seized 1,000 Bitcoin mining machines after a spike in power consumption.
While quoting an Iranian electricity officer, Arash Navab, BBC reported that:
“Demand for power rose by 7% in June, and cryptocurrency mining was thought to be the main cause. Two of these Bitcoin farms have been identified, with a consumption of one megawatt.”