For years, Iran has quietly become one of the world’s biggest Bitcoin mining hubs-not because its people love crypto, but because it’s one of the few ways left to bypass sanctions. But in early 2025, everything changed. The Central Bank of Iran (CBI) didn’t just tighten rules. It rewrote the entire game. Now, every miner, whether running a single rig in a Tehran basement or a 100-megawatt farm in Kerman, must sell their Bitcoin and other cryptocurrencies directly to the state. No exceptions. No side deals. No private exchanges. This isn’t just regulation. It’s nationalization.
Why the Iranian government is forcing miners to sell
Iran’s economy is drowning. The rial has lost over 90% of its value since 2018. Inflation hit 50% in 2024. Foreign banks won’t touch Iranian transactions. So the government turned to crypto-not to empower citizens, but to save itself.
Bitcoin mining became a lifeline. With electricity costing as little as 2 cents per kWh, Iran attracted miners from Russia, Turkey, and even China. By 2024, Iranian mining accounted for 4.5% of global Bitcoin hash rate. That’s more than Canada, more than France. But here’s the catch: most miners were selling their coins on peer-to-peer markets, turning Bitcoin into rials, and then using those rials to buy goods or send money abroad. That’s exactly what the government wanted to stop.
By January 2025, the CBI made it official: all mining operations must be licensed. And licensed miners must sell 100% of their mined cryptocurrency to the Central Bank at a fixed rate-set weekly based on the black-market dollar price. No selling on local exchanges. No holding onto coins. No converting to stablecoins. Just hand over the Bitcoin. Period.
This isn’t about controlling technology. It’s about controlling money.
The licensing system: who gets to mine
Not everyone can mine anymore. The CBI doesn’t issue licenses to individuals. Only state-approved entities qualify. That means:
- State-owned energy companies with surplus power
- Ministry of Industries-affiliated firms
- Entities linked to the Islamic Revolutionary Guard Corps (IRGC)
- Joint ventures with Chinese hardware manufacturers (with government oversight)
Independent miners? They’re effectively banned. Over 12,000 small-scale operations were shut down between November 2024 and February 2025. Many were found using stolen grid power. Others were caught routing mining income through unofficial channels. The CBI now has real-time access to every mining rig’s IP address, hash rate, and wallet address-all tied to a government-issued license ID.
And here’s the twist: the IRGC runs at least six of the largest mining farms in the country. One in Rafsanjan, with 175 megawatts of dedicated power, is estimated to produce over 200 Bitcoin per day. That’s roughly $15 million in Bitcoin revenue every week-going straight into state coffers. No private wallets. No offshore transfers. Just a digital pipeline from the miner to the Central Bank.
How the mandatory sales system works
Here’s the step-by-step process any licensed miner must follow:
- Register mining hardware with the CBI’s Digital Mining Registry
- Connect all mining rigs to a government-approved monitoring API
- Receive a unique mining license ID linked to a state-controlled wallet
- Every mined Bitcoin is automatically transferred to that wallet
- At the end of each week, the CBI converts the total Bitcoin into Iranian rials at the official rate (based on black-market dollar prices)
- Miners receive rials in their bank account-no choice, no negotiation
The rate isn’t market price. It’s set by the CBI to favor the state. In February 2026, for example, the market price of Bitcoin was $72,000. The CBI paid miners $64,500 per BTC. That’s an 10.4% tax on every coin mined. And there’s no way around it. The API won’t let coins leave the state wallet. Ever.
What happens if you don’t comply
Non-compliance isn’t a fine. It’s a criminal offense.
Miners caught bypassing the system-using unlicensed rigs, selling on local exchanges, or hiding coins in private wallets-face:
- Seizure of all mining equipment
- Up to 10 years in prison
- Blacklisting from all government services (banking, travel, utilities)
- Public naming in state media
Since January 2025, over 800 miners have been arrested. In December 2025, a 28-year-old engineer in Mashhad was sentenced to seven years for mining 12 Bitcoin and selling them on a Telegram channel. His equipment was auctioned off-by the state-for $200,000. He got nothing.
The crackdown isn’t just about money. It’s about control. The government wants to eliminate any chance that crypto becomes a tool for economic independence. If you can’t hold Bitcoin, you can’t bypass the rial. And if you can’t bypass the rial, you’re stuck in the system.
The energy crisis and the mining paradox
Here’s the irony: Iran’s grid is falling apart. Rolling blackouts hit 17 provinces in early 2026. The government blames illegal mining for draining power. But here’s the truth: the biggest power users aren’t home miners. They’re IRGC-run farms.
These state facilities get priority access. They’re connected to dedicated transformers, often on military bases. Meanwhile, residential neighborhoods get cut off for hours. In Qom, residents reported 14-hour outages while a nearby mining farm operated at full capacity-powered by a government-allocated line.
The CBI claims it caps mining at 2,800 megawatts total. But independent energy analysts say the real number is closer to 4,200 MW. That’s more than the entire output of Tehran’s main power plant. The government doesn’t publish real data. It only shares what it wants you to see.
What this means for Iran’s economy
By forcing miners to sell to the state, Iran has created a new source of foreign currency-without ever touching the dollar.
Every Bitcoin sold to the CBI is converted into rials, then used to buy essential imports: medicine, food, auto parts. The state then sells those goods domestically, keeping the profit. It’s a closed loop: miners mine → coins go to CBI → CBI sells coins for rials → rials buy imports → imports are sold for profit → profit funds the government.
Estimates suggest this system brought in over $1.2 billion in 2025. That’s nearly 8% of Iran’s total non-oil revenue. And it’s growing.
But it’s also creating a new class of economic dependence. Miners aren’t entrepreneurs anymore. They’re state contractors. Their income is fixed. Their freedom is gone. And if the CBI decides to lower the payout rate again? They have no recourse.
The underground still exists
Despite the crackdown, crypto isn’t dead in Iran. It’s just going deeper.
Telegram channels still trade Bitcoin for rials. Local crypto meetups still happen in cafes. Some miners are using solar panels and backup generators to run small rigs off-grid. Others are smuggling hardware into neighboring countries and mining abroad, then sending coins back through third-party wallets.
The CBI can monitor IPs. It can’t monitor people. And in a country where 70% of citizens have used crypto to buy essentials, there’s still a deep, quiet demand for digital money. The state may own the mines. But it can’t own the desire to be free from a failing currency.
What’s next?
The CBI is now pushing for a digital rial pilot on Kish Island. If successful, it could replace Bitcoin as the state’s preferred digital asset. But Bitcoin mining won’t stop. Not yet. Not until the grid stabilizes, or the sanctions lift, or the people stop needing it.
For now, Iran’s miners are caught between two truths: they’re helping the state survive. And they’re being used to keep them powerless.
Is cryptocurrency mining legal in Iran?
Yes-but only under strict state control. Mining is legal only if you’re licensed by the Central Bank of Iran. All mining must be done through government-approved entities, and every Bitcoin mined must be sold directly to the CBI. Independent or unlicensed mining is illegal and punishable by prison.
Do Iranian miners get to keep their Bitcoin?
No. All mined cryptocurrency must be transferred automatically to a state-controlled wallet. Miners receive Iranian rials in return, but they cannot hold, trade, or transfer Bitcoin themselves. The CBI sets the exchange rate, and miners have no say in the price they’re paid.
Why does Iran force miners to sell to the state?
Iran uses Bitcoin mining to generate foreign currency without using the U.S. dollar. By forcing miners to sell Bitcoin to the Central Bank, the government converts crypto into rials and uses that money to buy essential imports. It’s a sanctions workaround that keeps the economy afloat-and gives the state total control over the flow of digital money.
How much Bitcoin does Iran mine?
Iran accounts for about 4.5% of global Bitcoin mining. In 2025, it produced an estimated 30,000 Bitcoin annually, worth over $1.2 billion at market prices. Most of this comes from large, state-linked mining farms, especially those operated by the IRGC.
Can Iranians still use Bitcoin for payments?
No. Since December 2024, the Central Bank has banned all cryptocurrency-to-rial transactions through official channels. Using Bitcoin to pay for goods or services-even privately-is illegal. The only legal way to convert crypto to rials is through the state’s mandatory sales system for licensed miners.
What happens if a miner tries to hide their Bitcoin?
Miners caught hiding or transferring Bitcoin face severe penalties: imprisonment of up to 10 years, seizure of all mining equipment, and permanent blacklisting from government services. The CBI tracks every licensed miner’s hardware and wallet in real time. Attempts to bypass the system are treated as economic crimes.
