CoinDesk has acquired documents detailing a draft proposal for new cryptocurrency mining regulations in Iran, which sources in Tehran say is well on its way toward official approval.
Based on the translated proposal from the Cabinet of Iran, licensed and registered cryptocurrency miners will be required to submit information such as their list of business activities, the predicted value of their investments, current employment status, rental agreements for the space itself, the value of their mining equipment and the duration of the mining project. The license will need to be renewed every year.
Stepping back, the Iranian mining industry has grown dramatically over the past two years, thanks in part to state-subsidized electricity. For example, just one Persian Telegram group for local miners has 3,424 members. Based on a survey of more than 1,600 Iranian crypto users by the market analytics firm Gate Trade, 35 percent of respondents earned income through mining and 70 percent were interested in learning more about local mining businesses. One anonymous source in Tehran told CoinDesk that most miners he knows are “under the radar” and import equipment through the black market, without paying taxes.
As such, the Central Bank of Iran finally recognized the grassroots industry and promised a lawful licensing procedure in July 2019. This pending proposal was approved by Reza Rahmani, Iran’s Minister of Industry, Mine and Trade. The Iranian mining licenses would only apply to miners with equipment that requires 30 kilowatts, which might exclude homemade mining equipment or small operations.
However, another source in Tehran, an avid bitcoiner, told CoinDesk he supports this move because it could create the foundations for a sustainable mining industry in the country. For example, if too many miners in a single district apply, the authorities could encourage miners to distribute their operations across the region.
“It’s obvious that the power industry here in Iran, it’s not a private business, it’s from the government,” the second anonymous source said. “They need to figure out how to balance mining [operations] so that they wouldn’t harm the power grid. If there’s a constant, a continuous consumption of electricity you can also make new power plants or assign power plants to this.”
On the other hand, he still doesn’t believe this legislation will completely curtail the flood of hobbyist miners joining the bitcoin community.
“There will be a lot of underground mining operations,” he said. “I predict that this will happen, that the power grid will take a hit from the abundance of people who will do mining in their homes.”
A third source in Tehran told CoinDesk he expects Iran to become one of the world’s biggest players in the bitcoin mining sector over the next year.
Bitcoin miner image via Shutterstock