Iran: Cryptocurrency Industry now “Official” in the eyes of the Government

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Crypto Regulation
Iran: Cryptocurrency Industry now “Official” in the eyes of the Government

Irans Head of Economic Commission has announced to Mehr News Agency that the government now officially acknowledges the cryptocurrency industry. Seemingly, with a primary motivation to alleviate the weight of sanctions imposed by the U.S., the news arrives in tandem with the government loosely establishing energy rates for cryptocurrency mining, indicating a desire to foster a crypto-economy in Iran. This according to a seperate report from the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), July 22, 2019.

It’s Official

Over the years Iran’s journey to crypto is one of the least expected to have emerged, especially given the country’s harsh stance against Bitcoin trading in early 2018, one that was propagated by the Central Bank of Iran (CBI); at this time, the CBI had ordered other banks in the nation to cease any activity involving crypto transactions. Though shortly after, the government began experimenting with its own domestic cryptocurrency.

Since then, Iran has slowly warmed to the technology, with the citizens of Iran pouring billions into Bitcoin, and a growing discussion surrounding the utilization of cryptocurrencies as a means to circumvent U.S. economic sanctions.

The final straw however, was when the U.S. government forced the Swift banking network to cease trade with over 70 Iranian banks, thus opening up opportunities for blockchain/crypto firms such as Ripple to come and assist with cross-border remittance payments and transactions. Now it seems that Iran has a productive and clear direction in which it wishes to take the technology, which could blossom into something quite spectacular across the entire region.

Elyas Hazrati, Head of the Economic Commission in the Iranian Parliament has now signaled the government’s intentions going ahead. Speaking rather confidently after a meeting with officials with ICT officials, the finance ministry and the passive defense organization, Hazrati stated:

“…we do believe that cryptocurrency industry should be recognized as an official industry in Iran to let the country take advantage of its tax and customs revenues.”

The Price of Power

The announcement comes off the back of another crypto-bound decision, namely in regard to electricity tariffs for cryptocurrency miners. As per reports from the IICIMA, Iran’s economic commission has greenlighted a “mechanism to mine digital coins”, as stated by CBI Governor Abdolnaser Hemmati.

In this, the government has supposedly decided to price the power tariffs for cryptocurrency mining the same as exported electricity prices. Hazrati noted that “the prices are decided to be equal to exported electricity prices,”

Reportedly, it costs 2 cents to generate and transmit a kilowatt-hour (kWh), which is being sold at a rate of 0.7 cents per kWh

Though these plans are yet to be voted on by government ministers, Hazrati, with a plan in mind, said:

“By generating cheap electricity, we can provide the required power for digital money miners in the country,”

Adding:

“The gained income can be used for purchasing foreign exchanges under US sanctions to remove the difficulties we are faced with.”

For Iran, Bitcoin is a disavowed technology that has served as an observable prototype, and proof that digital currencies are a viable means of securing economic sovereignty. Similarly to Venezuela, where citizens are circumventing hyperinflation and the government with cryptocurrencies, Iran is attempting to undermine the U.S., which if anything is an extremely bold move that could pay off handsomely.

Aisshwarya Tiwari

Aisshwarya is currently working as the Chief Editor at crypto.news and holds more than 4 years of experience in the digital assets industry. He holds an undergraduate degree in Commerce with Honours and a post-graduate diploma in Liberal Studies. Before entering the crypto industry, Aisshwarya worked as an SAP Consultant for a global IT firm. He also cleared the CFA Level 1 exam before pivoting to the crypto industry due to its novel and exciting propositions.