US Sanctions Slam Iran's Bitcoin Mining Lifeline
The value of Iran's rial has plummeted to a record low after the US Treasury announced new sanctions targeting the country's bitcoin mining operations. The new measures, part of Operation Economic Outcast, aim to cripple Iran's state-run Bank Melli by cutting off its access to dollars and potentially imposing secondary sanctions on countries that continue to trade with Tehran.
The rial has lost roughly 25% of its value this year alone, reaching a rate of 2.02 million rials per dollar earlier this week. This is down from 1.53 million during the first quarter of the year. The collapse in the currency's value is largely attributed to the ongoing trade war and mounting geopolitical risk.
The sanctions package, which names digital assets as a sanctionable sector for the first time, targets Iran's bitcoin mining operations, which have been a key lifeline for the country's economy. Tehran legalized bitcoin mining in 2019, allowing licensed operators to tap into industrial electricity priced at $0.004 per kilowatt-hour and sell their mined coins to the central bank.