Countries with cheap electricity have emerged as major hosts of cryptocurrency mining. Photo: iStock

Iran has announced that it will now permit industrial-scale power plants in the Islamic republic to mine bitcoin – on the condition that they don’t use subsidized fuel.

In a statement to the Islamic Republic News Agency (IRNA) on July 27, Mostafa Rajabi Mashhadi, a deputy managing director at Tavanir, Iran’s Power Generation, Transmission and Distribution Management Company, said power plants in the country could operate as bitcoin mines “if they comply with approved tariffs” and have the necessary licenses, Cointelegraph reports.

Mashhadi said that any power plant considering such a venture could not use subsidized fuel for crypto mining.

“Now we’re in a situation where the supply of electricity is of great importance to the public,” the energy spokesman said. “We will not allow anyone to misuse tariffs provided for the agricultural and industrial sectors to produce bitcoin while it’s worth more than $9,000.”

Iran’s Ministry of Industries, Mining and Trade has issued 1,000 licenses for crypto mining since the government authorized it as an approved industrial activity in July 2019.

According to the IRNA, a spokesman for the electricity industry said 14 crypto miners in Iran had requested more than 300 megawatts (MW) of power – equivalent to the usage across three provinces in the country.

The tariff scheme for crypto miners in Iran is dependent on market factors such as fuel prices in the Middle East. Mining requires a lot of power, but the country’s electricity is very cheap compared to the rest of the world. Mashhadi estimated in 2019 that the production of a single bitcoin would use only about $1,400 in state subsidies.

People who expose illegally operating cryptocurrency mining companies in Iran also receive a bounty of up to 100 million rials, or $2,375.

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