Cryptocurrency

Iran bans trading of crypto not locally mined

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Trading Bitcoin (BTC) and other cryptocurrencies that are mined in foreign countries are now taboo in Iran.

Reports from media outlet Iran International have mentioned a Cabinet decision of Iran’s Central Bank that now requires all digital currencies exchanged in the country to be mined locally.

Several analysts have shared sentiments about the move, implying that it will be nearly impossible to enforce the ban. Some even believe that this cannot be enforced on an individual level.

The real agenda

According to Bitcoinist, Fatemeh Fannizadeh, an independent lawyer and advisor on blockchain technology and cryptocurrencies, thought that banks and Forex companies that leverage digital currency for paying imports are the actual targets of the ban.

She believes that this is an attempt of the country’s central bank to prevent capital flight from the nation. Fannizadeh said that crypto is already regulated in Iran and this “just means that Iran wants to export Iranian produced coins more aggressively,” and counter the depreciation of the Islamic republic’s fiat currency Rial.

Back in 2020, the Rial hit a record low against the U.S. dollar. It would seem that the central bank is being protective of its currency and economy, hence the ban.

Regulating Bitcoin and mining

Iran has always had a deep connection with Bitcoin (BTC) and Bitcoin mining as evidenced by subsidized electricity that makes the country ideal for mining cryptocurrency.

Despite this, local authorities have exerted effort to regulate the mining industry by requiring mining operations to be officially licensed first before allowing the use of Bitcoin produced as payment for imports.

As for the ban now enforced by the CBI, there is no clear way on how the restrictions can be implemented given the decentralized nature of Bitcoin and other cryptocurrencies. So as it would seem, the ban is technically still up in the air.

 

Image courtesy of Cointelegraph News/YouTube

Jet Encila

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Jet Encila

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