Iran Uses Cryptocurrency Mining To Minimize Impact Of Sanctions, Study Finds – 05/21/2021 – Market

About 4.5% of all bitcoin mining takes place in Iran, allowing the country to obtain hundreds of millions of dollars in cryptocurrencies that can be used in imports, thus minimizing the impact of the sanctions imposed. domestically by the United States, according to a study published on Friday (21).

At the current mining level, Iran’s bitcoin production is expected to represent a turnover of nearly $ 1 billion (5.2 billion reais) per year, according to figures from the data analysis firm blockchain. Elliptic.

Iranian government officials could not be reached immediately for comment.

The United States government has imposed an almost total economic embargo on Iran, including a ban on all imports.

While the exact numbers “are very difficult to determine,” Elliptic’s estimates are based on data collected from bitcoin miners by the Cambridge Center for Alternative Finance in April 2020 and statements from the power generation company. owned by the Iranian state, which said in January that up to 600MW was being consumed by bitcoin miners.

Bitcoin and other cryptocurrencies are created through a process called mining, in which powerful computers compete against each other to solve complex mathematical problems. The process requires a lot of energy.

Iran’s central bank bans transactions with bitcoin and other cryptocurrencies produced abroad, although the currencies are widely available in the underground market, according to local media.

Iran has officially recognized cryptocurrency mining as an industry in recent years, offering cheap energy and forcing miners to sell all produced coins to the central bank. The supply of cheap energy for the activity has attracted more groups to the country. Tehran allows cryptocurrencies mined in Iran to be used to pay for imports of authorized products.

The electricity consumed by miners in Iran is equivalent to about 10 million barrels of oil per year, or about 4% of the country’s oil exports in 2020, according to the survey.

“Iran, therefore, is effectively selling its oil reserves on world markets through bitcoin mining to circumvent trade embargoes,” the study said.

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