The Iranian government appears to be softening its stance on cryptocurrency mining in the country. In an announcement from Iran’s Chamber of Commerce, Industries, Mines and Agriculture on July 22, officials with the government’s economic commission announced a new “mechanism” that would bring the country’s growing cryptocurrency mining industry “in line” with existing laws.
The announcement of the new policy marks a sharp and sudden shift for Iran’s government. As recently as June 27, 2019, the country’s Ministry of Energy raided and shuttered two cryptocurrency mining operations in the province of Yazd following a massive power spike in the region. According to Chinese crypto news outlet 8BTC, the country has become a new “hotspot” for Chinese-backed mining firms due to the abundance of inexpensive, government-subsidized electricity.
According to Central Bank of Iran (CBI) Governor Abdolnaser Hemmati, the new rules for crypto mining were “approved by the government’s economic commission and will later be put to discussion at a cabinet meeting.” While not final, the decision provides a degree of relief for Iranian crypto miners, many of whom feared a government crackdown was on the horizon.
Iranian entrepreneurs have increasingly turned to bitcoin and other cryptos in an attempt to sidestep U.S.-backed international banking sanctions intended to slow, or even cripple, the country’s economy. Even without state-level support, crypto miners have managed to bring the equivalent of millions of dollars into the politically isolated country, a development that likely played a significant role in the government’s surprising policy change. It’s possible that leaders in Tehran increasingly view cryptocurrency as a viable option for weakening the impact of sanctions, as blockchain-based payments can be difficult to track and are virtually impossible to censor.
Should Iran decide to move forward with developing an infrastructure for its growing sanction-avoiding cryptocurrency industry, it has at least one state-level example to learn from. Although widely considered a failure, Venezuela’s state-backed Petro token was created specifically to avoid U.S. sanctions in the international oil trade. Iran’s central bank has already floated the idea of launching a “Crypto-Rial” to compliment their native Rial currency.