An Iranian think tank has proposed that the country develop a large-scale local cryptocurrency mining economy and use crypto assets to circumvent international sanctions.
According to a report by local news outlet IranWire, the Iranian Presidential Center for Strategic Studies—a think tank with close ties to current local president Hassan Rouhani—suggested that the country should leverage the crypto economy.
In a recent study, the organization suggested that developing a regulated crypto mining industry could help the country circumvent sanctions without spending precious foreign currency reserves, as local buyers could obtain Bitcoin for rials instead of dollars.
“As the newly-extracted Bitcoins are not easily traceable… despite the pressure of sanctions on the country, domestic economic actors can use newly-extracted cryptocurrencies, which are preferable to existing Bitcoins, on international exchanges.”
Iran is not completely new to the idea of using digital assets to circumvent international sanctions. At the beginning of 2019, reports suggested that the country’s government was about to announce its central bank digital currency (CBDC) which would be leveraged to avoid sanctions. While not much has been reported since then, reports published at the end of 2020 suggest that the local central bank is working on a digital rial.
Nor is it new to crypto mining, or concerns about the energy they consume. In January, the Washington Post reported that Iran’s government said mining farms were partially responsible for blackouts, and began shutting some down.
The think tank’s report suggests that crypto asset mining could generate $2 million per day and $700 million a year for the Iranian government. The miner fees paid for transactions verified on the Bitcoin (BTC) network alone could reportedly net $22 million a year.
The report also suggests that establishing cryptocurrency mining facilities would help increase Iranian employment rates. Furthermore, the increased electricity generation would bring more employment—nine people per megawatt of electricity consumption.
“If large mining farms are established,” the report said, “the need to employ manpower for monitoring and repair, security, electrical engineers and technical staff related to hardware and software equipment will increase, which leads to more job opportunities in other sectors.”
Furthermore, the think tank also believes that such an industry would allow the country to export the technical and engineering services needed for cryptocurrency mining and attract foreign investment while also reducing reliance on foreign currencies.