Iran Authorizes Use Of Officially Mined Cryptocurrency For Import Payments
Iran has updated its rules on officially mined cryptocurrencies like bitcoin so they can be used more widely for import payments.
The Central Bank of Iran has declared that licensed banks and moneychangers in the country can use cryptocurrency that has been mined by officially sanctioned miners to pay for imports, according to a report from the Financial Tribune.
Hit hard by international sanctions, Iran likely sees the use of cryptocurrency as a way to operate outside of traditional financial controls. In October 2020, the Iranian central bank amended its regulations so that bitcoin and other cryptocurrencies could be mined officially under government control, using subsidized energy, then supplied to the government for funding imports. Now, the central bank has apparently extended the legal use of cryptocurrencies to additional groups within the country.
“It said lenders and moneychangers have been notified about the regulatory framework for crypto payment,” per the Tribune. “No further details were announced, the CBI website reported.”
In 2019, Iran legalized cryptocurrency mining while instituting heavy-handed regulations to control it. Upon embracing the practice as a way to accrue sanction-resistant funds, some wondered if Iran were pivoting to become a “Bitcoin nation.” But Bitcoiners within the country were dubious about the idea that Iran would horde or directly deal with bitcoin, and this latest update to regulations indicates that it would like individual businesses within the country to leverage cryptocurrency.
“I don’t think the central bank will touch bitcoin in any way,” Ziya Sadr, a Bitcoiner based in Tehran, told Bitcoin Magazine last year. “The system will only provide rates and stuff and the bitcoin will be transferred from sender to receiver directly.”
They also noted that regulations about exactly how they can use bitcoin would only incentivize bitcoin miners in Iran to take the practice underground.
“Due to the high price of electricity and gas for the extraction of cryptocurrencies in Iran, the result of changing this decree will be the reduction of bitcoin production in Iran, because no miner is interested in providing his bitcoin to the government,” Omid Alavi, a CEO of an approved bitcoin mining farm in Iran, told Bitcoin Magazine at the time.