It is especially important for countries to become more aware of cryptocurrencies, especially with components like decentralized finance rising in prominence. Now that the Middle East is becoming more mining-friendly, the future suddenly looks bright once again for this region.
Pakistani administration legalizes crypto mining
The Pakistani government appears to be moving quickly toward a pro-crypto stance. Following a commitment to integrate Bitcoin (BTC) into its financial system last December, the country is taking steps to legalize mining.
Sumera Shams, a member of the provincial assembly in Khyber Pakhtunkhwa, announced on Twitter that the body had voted to pass a law legalizing mining:
Khyber Pakhtunkhwa’s Assembly anonymously passed my resolution on #Cryptocurrency & #Cryptomining. Indeed #Pakistan progressing towards digitalisation to compete the world. Kudos to @ZiaBangashPTI & @fawadchaudhry for their hard work and dedication in the field. https://t.co/id2LUnnGBo pic.twitter.com/TbQvYDsMEl
— Dr Sumera shams (@SumeraShams) December 2, 2020
Khyber Pakhtunkhwa is one of the major provinces in Pakistan. It is located in the country’s northern region and is a driving force behind the country’s development. According to further confirmation from Zia Ullah Bangash, chief advisor on science and information technology to the region’s chief minister, the area voted to legalize mining.
Local news sources claimed that the assembly had passed a draft legislation showing a commitment to embrace what could possibly be the future of money. Legislators explained that they believed cryptocurrencies would replace fiat currencies eventually and that it is important for them to be at the forefront as this development comes.
By embracing mining, they hope to usher in the next financial revolution. The bill passed in a unanimous vote, showing that legislators were indeed looking forward to bolstering their digital and financial spaces.
Waqar Zaka, an influencer and pro-crypto activist, tweeted that this was “one province done, three more to go.” While this doesn’t mean that all of Pakistan has embraced mining, it is indeed a step in the right direction.
It is unclear how the northern region wants to move forward with its mining strategy. However, it should be able to develop a robust regulatory regime that will encompass the entire industry and allow for investment to flow.
Iran doubles down on mining
Pakistan is not the only country in the Middle East that is moving quickly toward the legislation of mining. In fact, it currently trails Iran in that regard.
Iran’s embrace of crypto mining has been swift. The country initially outlawed the activity after noticing that citizens had begun operating mining outfits in mosques. Most mosques get electricity subsidies from the government, and these miners had set up their operations to ensure that they would profit from it.
The situation was particularly dire because crypto had started gaining traction in Iran at the time. Sadly, it turned sour when the government began to seize mining equipment found in mosques. A report on the issue claimed that Mostafa Rajabi Mashhadi, an official at the Iranian Ministry of Energy, pointed out a 7% jump in the consumption of electricity in June 2019.
Mashhadi reportedly added that crypto miners had been responsible for the rise in consumption levels. So, the government chose to take preventive steps to avert any issues with Iran’s power grid. He pointed out that the government will identify miners and immediately cut them off the power grid — until all parties reach a reasonable agreement over pricing policies for miners.
In November 2018, Iran was ranked on top of the global energy subsidy list, providing up to $45.1 billion annually. That figure represented a 10th of its annual gross domestic product that year. Considering that Iran had been dealing with stringent economic sanctions from the United States government and the international community over its nuclear program, it couldn’t afford to pay more in subsidies.
However, these same policies have forced the country to rethink its policies. In July, the Iranian government officially ruled to declare crypto mining an industrial activity in the country. A report from the Mehr News Agency stated that the government had held a cabinet meeting, chaired by President Hassan Rouhani.
The legalization essentially made mining an official industry. At the same time, individuals and businesses looking to engage in the activity would need to get licenses from the Ministry of Industry, Mine and Trade.
It was a perfect match. Electricity prices are pretty cheap in Iran. Statistics from Global Petrol Prices at the time showed that the country charged almost $0.005 per kilowatt-hour. Considering that this is much better than what other countries charge, it is no doubt that this will be lucrative.
So far, over a thousand individuals and entities have jumped into the Iranian mining space, taking advantage of the cheap electricity. In return, the country has enjoyed a boost in revenues and taxes. The economic sanctions from the United States and the international community have continued to grow, and this means that the country is strapped for cash. With a fledgling industry like cryptocurrency mining, it can offset some of these costs.
It is unclear whether any countries in the Middle East will join the fray anytime soon. Saudi Arabia is growing to be the blockchain hub, although most of its efforts have been aimed at using the technology to improve its government and private industries. With the prospect of crypto legislation rising there, there is no reason why mining can’t become more of a recognized activity as well.