First Vice President Mohammad Mokhber on Sunday announced new rules for crypto assets, adding some detail to regulations approved in 2019.
Henceforth cryptominers should get special permits from the Ministry of Industries, Mining and Trade and also permission from the ministry for importing equipment. Moreover, the Iran Standard Organization needs to approve the mining devices before it is used.
The government has provided further details about supplying power to mining centers. Licensed miners are given some options for access to electricity for their farms, including establishment of in-site renewable power plants, using the output of renewable plants, or starting their own small power generators.
For electricity and natural gas miners will have to pay their bills based on export tariffs and must reduce operations by half in the summer season.
Electricity prices for cryptomining are set according to export tariffs and subject to currency rates at Nima -- the currency platform where forex is traded among importers and exporters.
New rules require the ministries of oil end energy to announce power rates on a quarterly basis and inform miners about peak season adjustments well in advance.
Among other things, the new regulations state that mining crypto assets by using power (natural gas or electricity) subscribed for any other purpose is illegal and those in breach will be penalized.
Before imposing penalties, in the past Iran Power Generation, Transmission and Distribution Company, Tavanir, used to confiscate illegal cryptomining equipment and cut electricity. Offenders were also obliged to pay for damages to the national grid.
Tavanir has urged policymakers to further tighten the rules targeting illegal miners and insists that “the existing regulations are not preventive enough.”
According to Tavanir, more than 7,200 unauthorized cryptomining centers have been found and shut since 2020. Earlier it said that illegal miners used 3.84 trillion rials ($16.5 million) in subsidized electricity and inflicted 380 billion rials ($1.3 million) in damages to the national grid.
Unconvincing
Observers, however, are not convinced and say the new rules do not go far enough in addressing the drawbacks and deficiencies that have long deprived the sector of the growth it deserves.
The Majlis Research Center, the research wing of the parliament, has also taken a stance on the negative impact of the government ban on cryptomining and closure of unauthorized mining centers and dismissed it as a failure.
Like previous regulations, the new rules only cover mining of cryptocurrencies, extending the ban on trading cryptos. "Traders should take responsibility for using cryptocurrencies and beware that the risks will not be covered or compensated by the government and banks."
The Central Bank of Iran is tasked to develop a platform in which licensed miners can sell their output to be used for importing goods.
Back in August, Iran's Trade Promotion Organization said $10 million in cryptocurrency was used recently for settling an import bill, noting that the country is targeting implementation of smart contracts in foreign trade arrangements by October.
The ICT Ministry is also tasked to develop supervisory solutions for miners' consumption trends.
In the previous regulations, mining cryptocurrencies would be a taxable business and be eligible for tax exemption if crypto miners repatriate their earnings to the country. However, the government has decided to remove the exemption and treat cryptominers like other exporters.
Cryptocurrency mining centers can also be established in free trade zones, where local authorities will be in charge of licensing applicants, instead of the Industries Ministry.
Many officials have proposed transforming Iran’s Kish Island in the Persian Gulf into a hub for domestic and international cryptocurrency exchanges.
As per law, miners can use excess output of power grids in the Kish free and special economic zones. Power generated in the FTZs cannot be used in the mainland nor can it be traded. Therefore, the excess production can be used for cryptomining.
