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Miners are required to sell Bitcoins to Central Bank of Iran: CBI using Bitcoins to pay for imports amid economic sanctions.

ISLAMABAD: Bitcoin mining has proved a blessing for Iranians as they are earning dollars despite economic sanctions. Iranian officials have estimated a potential of generating more than eight billion dollars a year from the mining of Bitcoin cryptocurrency. To achieve this goal, Iranian Industries, Mine, and Trade has issued more than three thousand licenses for Bitcoin’s mining in less than two years period.

Additionally, the Ministry is regularly issuing new Bitcoin mining licenses to individuals and companies with the aim to expand scope of earning maximum foreign exchange.

Details gathered by The Truth International (TTI) revealed that in 2019, the Iranian government officially recognized the mining of Bitcoin while at that time, hundreds of Iranians have already initiated Bitcoin’s mining to earn dollars amid economic sanctions. Nevertheless, in 2019 the Iranian government declared mining of Bitcoin legal, but linked the cryptocurrency’s mining with the issuance of a license from the Ministry of Industries, Mine, and Trade.

Consequently, Iranian companies and individuals are getting license from the ministry before starting the mining business. Iranian government has attached two strings to the mining of cryptocurrency wherein all the miners will pay higher tariff of electricity and they will sell Bitcoins only to the Iranian State Bank which uses the cryptocurrency to meet national imports’ requirement amid the economic sanctions imposed by the United States.

In other words, Bitcoin mining has opened a reliable and an easy source of income for thousands of the sanctioned-hit Iranians to earn dollars. It also empowered Iranian government to pay for its imports amid sanctions. Bitcoin is the leading decentralized cryptocurrency that originated from America in 2009, but it expanded throughout the world rapidly, particularly from 2015 when it got much limelight in the media.

Since April 2021 Bitcoin has become a talk of the town as it crossed 63,000 mark for the first time and then fell to around $30,000 in June amid crackdown against miners in China. These days, the value of this currency is fluctuating around $34,000.

To how much extent the mining of Bitcoin has expanded in Iran in recent months, it can be imagined well from the fact that in May 2021, the Iranian government was left with no other choice but to impose a ban on crypto’s mining for four months as the country experienced unexpected power outages due to extra-ordinary power consumption. Analysts have estimated more than 2-Giggawatts power consumption by the Bitcoin miners in Iran on daily basis. Iran is providing subsidized electricity to its citizens, but charges a higher rate from cryptocurrency miners.

According to April 2020 ranking of the world’s leading Bitcoin mining countries, Iran was the 6th largest country with 3.8 percent share in mining. However, in 2021, Iran’s share increased to more than four percent of the global mining of crypto. In April 2020, China was leading miner with 65 percent global share followed by 7.24 percent share of USA. Similarly, Russia accounted for 6.9 percent of global mining, Kazakhstan 6.17 percent, Malaysia 4.33 percent, Iran 3.82 percent, Canada 0.82 percent while share of Norway was 0.48 percent. Nonetheless, latest research reports indicate a substantial decline in mining of cryptocurrency in the backdrop of a crackdown in China against miners and closure of a number of mining companies there.

Javed Mahmood
Written By

I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.

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