Study: Iran Bypasses Sanctions Through Bitcoin Mining

Iran accounts for 4.5% of all Bitcoin mining. The cryptocurrency helps the country circumvent sanctions and buy imported goods, according to analysts at Elliptic.

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The estimate of Iran’s share globally is based on data from the Cambridge Centre for Alternative Finance and statements by the state-controlled Iranian energy company that miners consume up to 600 MW of electricity.

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Elliptic estimates that this level of mining yields roughly $1 billion annually, and producing that amount of electricity would require about 10 million barrels of oil. That represents around 4% of Iran’s total oil exports in 2020.

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Analysts emphasise that many of those who conduct Bitcoin transactions and pay fees to Iranian miners are based in the United States—the country that initiated sanctions against Iran.

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“If 4.5% of Bitcoin mining is based in Iran, there is a 4.5% probability that any Bitcoin transaction will include a fee paid to an Iranian miner,” Elliptic noted.

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In 2019, Iran recognised cryptocurrency mining as an industrial activity and began licensing miners.

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In 2020 Iranian power plants were allowed to operate with mining centers for cryptocurrencies, provided they held a license.

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According to media reports, this year the Central Bank of Iran allowed banks and other financial institutions to use cryptocurrency to pay for imports.

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