Iran must mine bitcoin and other cryptocurrencies to circumvent sanctions | Finances

Iran’s government recently published a report suggesting that the country adopts bitcoin (BTC) mining and other cryptocurrencies as a source of extra income. The document emphasizes the country’s need to generate more resources amid the international sanctions imposed.

Bitcoin mining would be a means of circumventing sanctions in Iran (Image: Marco Verch / Flickr)

The report states that the extraction of cryptocurrencies can bring economic benefits to various sectors of the country’s economy. Prepared by the Iranian Presidential Center for Strategic Studies, the document estimates that, with proper state intervention, Iran could generate $ 2 million a day and $ 700 million a year through the mining of crypto.

The pseudo-anonymous nature of cryptocurrencies is also a point raised. If Iran were to mine digital assets, the government could benefit from using multiple digital portfolios to make it difficult to link the revenue generated to the government, thereby circumventing international economic sanctions imposed on the country.

Mining facilities would generate jobs

To create the necessary framework for the extraction of bitcoin and other cryptocurrencies, the government would need to invest in expensive technology and build mining facilities. The benefits would go beyond the extra revenue generated, they would also imply the creation of more jobs that would warm the national economy.

The document makes another comparison: for each megawatt of electricity consumed more, about 9 people would be employed. Thus, the high energy consumption of cryptocurrency extraction activity would even have its positive side.

“If large mining facilities are established, the need to employ manpower for monitoring and repair, security, electrical engineering and technical staff related to hardware and software equipment will increase, which leads to more employment opportunities in other sectors” says the proposal.

Regulation would make mining legitimate

The Iranian Presidential Center for Strategic Studies also suggests that activities with cryptocurrencies be regulated in Iran. In this way, fewer Iranians would seek foreign currencies or trade outside the country. Once the proper rules were established, the population could buy cryptography using rials (Iranian currency) within the country.

The proposal also ambitiously states that, once cryptocurrency extraction was consolidated in the country, even the export and technical engineering services sector would be strengthened. With that, the country would be more attractive to foreign investors.

Iran faces energy crisis, but wants to mine bitcoin

However, there is a controversial point in the document. During that winter in Iran, gas consumption increased considerably for heating homes. In addition, the COVID-19 pandemic forced the population to stay at home, increasing electricity demand.

Gas is one of the main Iranian energy sources. With its scarcity, the country suffered from multiple blackouts throughout January. To get around this, the plants started to burn low quality fuels to supply the country electrically, generating large and dense clouds of pollution.

Even so, the document states that bitcoin mining activity, for example, could “improve efficiency in the electricity sector” and increase its capacity.

“Iran’s economy cannot easily sell its oil and gas in the face of sanctions, but by building cryptocurrency mining facilities, the country reduces electricity losses and converts gas into digital assets, which generates high income for the economy in times of sanctions ”, explains the report.

With information: IranWire

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