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Homayoun Ha’eri, Iran’s deputy energy minister for power and electricity, recently announced that the Economic Commission of Iran has confirmed power tariffs for cryptocurrency miners, Financial Tribune reported on July 21st. These tariffs will be the same as the ones used for electricity exports. However, the decision remains pending as the nation’s cabinet hasn’t approved it yet.
The rates finalized by the commission were not particularized by the minister. According to him, the electricity export prices are not fixed and will deviate depending on several factors including fuel prices in the Persian Gulf.
Earlier this month, the Iranian government was reportedly looking into the authorization of cryptocurrency mining in the country. However, the government was only willing to do so on two major conditions: the mining should be done “based on the price of electricity for export” and the mined cryptocurrencies should be “fed back to the national economic cycle.”
Mining of cryptocurrency in Iran became popular due to cheap electricity. Low electricity rates led to a reported 7% increase in the overall electricity consumption of the country. According to Mostafa Rajabi Mashhadi from the Energy Ministry of Iran, mining 1 Bitcoin(BTC)trade costs around $1,400. The electricity consumption of mining 1 BTC is equivalent to the annual electricity consumption of 24 buildings in Tehran. Even though the government does not want to ban cryptocurrency’s mining altogether, an increase in the electricity bill due to the tariff would still have an impact on cryptocurrency mining activities.
Currently the price of electricity is $0.05 per kilowatt hour in Iran. These cheap electricity rates are not just used by local miners, but also by some Chinese miners. The cost of exported electricity ranges from $0.07 to $0.10 per kilowatt hour. It has not been confirmed yet what the price of the electricity would be for the crypto miners though.
Proper Authorization for Crypto Miners
Even with higher electricity cost, while some other countries are on a crackdown against virtual currencies, Iran might become a bearer of hope for its crypto users. According to Deputy President of the Islamic Republic of Iran Customs Administration (IRICA) Jamal Arounaghi, customs department of Iran is still to issue licenses for the import of mining equipment, with proper authorization, the fear of being shut down will no longer remain for the miners.
It is in Iran’s interest to support and empower the local crypto community. Iran has been working on its own gold-backed cryptocurrency to bypass sanctions imposed on the country by US.