Iran Is Reportedly Planning to Bypass International Sanctions by Engaging in Bitcoin Mining and BTC Transactions

Iran’s Presidential Center for Strategic Studies, which is a thinktank that is attached with President Rouhani’s office, has released an extensive report which emphasizes the need for the so-called rogue State to use decentralized cryptocurrencies to generate additional revenue.

Extracting these virtual currencies, the report explains, might offer certain financial or economic advantages to various sectors of the Islamic nation’s struggling economy. The report notes that if the government adopts a serious approach to transacting in digital currencies, then it might be able to earn $2 million per day and $700 million during a year in revenue from crypto transactions.

Earnings from receiving transaction fees for the global, decentralized Bitcoin (BTC) network may generate as much as $22 million in capital per year for Iran’s government, the report claims.

The report further noted that establishing more facilities like Bitcoin mining centers in Iran could potentially result in creating new jobs and increasing the employment rate. Virtual currency miners, the report noted, also have a basic requirement for power or electricity, and for every megawatt of power consumption, around 9 local workers may be directly employed.

As first reported by Iran Wire, the report’s authors stated:

“If large [cryptocurrency] mining farms are established, 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.”

The report also mentioned that regulated digital currency transactions in the country may help with preventing foreign currency from leaving Iran by reducing the requirements for locals to purchase these currencies. Instead, the report stated, applicants may purchase cryptocurrency using rials (which can be done locally in Iran).

Other benefits of cryptocurrency “extraction,” the report explains, may include “strengthening the export sector of technical and engineering services associated with the production of cryptocurrencies” and “the possibility of attracting foreign investment and reducing the need for foreign currencies.”

The report also pointed out that Bitcoin would be quite useful or effective when it comes to bypassing international sanctions on Iran.

The report added:

“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.”

It may be questionable that the country is focused on committing more electricity resources to digital currency mining, because it may not necessarily be such a good idea. That’s because the Iranian electric power network is outdated and the country is already struggling to offer power to local residents, with several cities experiencing major outages on a regular basis.

However, the report noted that virtual currency mining could potentially improve “efficiency in the electricity industry”, “electricity generation capacity” and “balancing electricity consumption and production.”

The report also noted that “Iran’s economy is not easily able to sell its oil and gas in the face of sanctions, but by building cryptocurrency mining farms, it reduces electricity losses and converts gas into cryptocurrencies, which generates high income for the economy in a time of sanctions.”

The report also suggested that the Iranian government should consider becoming more “flexible” when dealing with these decentralized cryptocurrencies. The country may want to look into enabling or supporting the “collective mining” of digital currencies. Iran could establish crypto mining pools right next to local power plants, and also adopt a clear policy for all local miners. The report emphasized the importance of maintaining transparency in the applicable regulations and legislation while ensuring compliance with a clear set of rules.

Iran’s government is well-known for using almost any means necessary to bypass crippling US-led sanctions in order to finance the nation’s administration. These efforts reportedly include smuggling to establishing front companies, to forging online identities and (more recently) using virtual currencies.

During Mahmoud Ahmadinejad’s presidential terms, Iranian institutions and law enforcement had reportedly taken oil from the government and then sold it, so they could finance their operations.

The Iranian parliament has also reportedly issued various licenses in order to support the “underground” economy and to raise the funds to help the country.

Prohibiting transactions involving private, “unlicensed” virtual currency mining in Iran may be somewhat of a double standard, according to critics and analysts. Since the beginning of this year, many reports have surfaced regarding activity by foreign investors in cryptocurrency mining in Iranian cities (even China-Iran partnerships).

Iranian thinktanks have also emphasized the need for the nation’s government to use cryptocurrencies to circumvent US-led international sanctions. It now appears that the Office of President Hassan Rouhani has become more serious about using crypto.

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