Iran issues licenses to miners under new regulatory framework after closing several illegal mines

According to foreign media reports, the Iranian government has begun issuing licenses to crypto miners under a new "comprehensive and detailed" regulatory framework approved last week. The authorities had previously issued licenses to some crypto mining operations, but stopped the process due to power consumption and illegal mining issues.

The specific news pointed out that the Iranian government approved a "comprehensive and detailed" set of crypto regulations at a meeting last week, including regulations on crypto mining. According to local media reports, Iran's Minister of Industry, Mines and Trade Reza Fatemi Amin said that his department has now been approved to resume issuing crypto mining licenses. He was quoted as saying: According to government regulations, entities that apply to mine crypto assets can obtain establishment licenses and operating licenses.

An entity needs a pair of licenses before it can start mining cryptocurrencies in Iran: an establishment license and an operating license. The former establishes the entity as a legal crypto miner, while the latter allows it to actually start crypto mining.

Furthermore, Mohsen Rezaei Sadrabadi, secretary of the government's cryptocurrency task force, shared some details of the newly approved regulatory framework for cryptocurrencies, saying that mining centers can now apply for licenses and use mined cryptocurrencies to pay for imports. He explained that the Ministry of Industry, Mining and Trade is responsible for issuing licenses to crypto miners, adding that the new regulatory framework has provisions for large-scale crypto mining operations. There are also provisions for the supply of energy to the mining industry, with priority given to renewable energy.

Furthermore, Rezaei Sadrabadi noted that the government has decided to make the central bank the main regulator of the crypto industry. However, he believes that crypto regulation should be multi-dimensional and one regulator should not oversee the entire industry, as the crypto ecosystem includes more than just cryptocurrencies.

In 2019, Iran's central bank banned crypto trading within the country, but the government legalized crypto mining as an industry. A regulatory framework was subsequently established that requires crypto miners to obtain licenses, prove their identities, pay higher electricity rates, and sell the Bitcoin they mined directly to the government. In July, Iran amended some regulations to make it easier for crypto miners to access renewable energy.

In December, the Iranian government ordered licensed cryptocurrency miners to temporarily cease operations as extreme weather took a toll on the country’s power grid during the colder months. The state power company then announced a four-month ban on crypto mining in May, but lifted the ban in mid-September after licensed crypto mining facilities voluntarily shut down their operations to reduce the burden on electricity.

Iran issued more than 1,000 crypto mining licenses under its previous regulatory framework. Iranian authorities revealed in May that they had shut down nearly 6,914 illegal crypto mining farms. Tavanir, Iran's power generation, distribution and transmission company, claims that illegal cryptocurrency mining in Iran accounts for nearly 85% of the industry's electricity consumption. It has threatened to take tough measures against unlicensed crypto miners and has seized nearly 10,000 illegal mining devices since March.

It is worth mentioning that despite banning cryptocurrency transactions in 2019, the Iranian government is now preparing to widely use cryptocurrencies for international trade payments by the end of September. It is reported that Iran has been subject to US sanctions for many years, mainly targeting Iran's financial and banking sectors, which has also hindered most international business conducted by the country. Iranian Trade Minister Reza Fatemi Amin said on Monday that the government has finalized regulations on the use of cryptocurrencies to pay for imports. Earlier in early August, Iran conducted its first trial run and purchased a batch of cars worth $10 million, which were paid in cryptocurrencies.

Bitcoin Magazine said on social media that Iran's Deputy Minister of Trade said that Bitcoin and cryptocurrencies will be widely used in foreign trade by September.

Earlier, the Iranian Importers Association stressed that since the Iranian government officially uses cryptocurrencies to pay for imports, a stable regulatory framework for cryptocurrencies is needed. Chairman of the Iranian Importers Group and Representative of Foreign Companies (Importers Association) said that a stable regulatory framework for cryptocurrencies should be established to allow cryptocurrencies to be successfully used as a means of payment for imports. Managhebi pointed out that cryptocurrencies can be useful in this regard with the appropriate regulatory infrastructure. The main question is whether the Iranian government has set fixed rules for the use of cryptocurrencies that will not change for a few months, and at the same time businesses active in this digital field will not be harmed.