Following a crackdown on cryptocurrency mining, Iran is now preparing to implement new legislation that will regulate cryptocurrency use and ban the use of cryptocurrency mined outside the country.
Iran’s economy which largely relied on exporting its oil reserves, has suffered as the result of sanctions imposed by President Trump. Unable to export most of its oil, Iran has had to shift its reliance upon this, and focus on manufacturing and focus on alternative industries.
President Hassan Rouhani recently called for the regulation of cryptocurrency at a a meeting of the government’s Economic Coordination Board:
“For legalizing the activity of cryptocurrencies and protecting people's capital in this area, we must think of a solution as soon as possible and lay down and communicate the necessary laws and instructions”
The president had previously ordered mining facilities to be closed, a move that was believed to be due in part to the major power outages that the nation has been experiencing. Bitcoin mining has been blamed by the government for these power shortages, resulting in mining operators who had turned to crypto mining to supplement an ailing economy, being closed down.
In a governmental u-turn, Iran has now proposed new legislation which would involve licenses being given to bitcoin mining farms. Cryptocurrency miners may also be able to apply for special licenses to build new power plants, and sell on the excess energy to the Ministry of Energy.
However, the regulation of cryptocurrency mining isn’t necessarily a progressive move by the government, and may not bode well for these organizations long term. Lawmakers have drafted a bill titled “Support for cryptocurrency mining and organizing the domestic market for exchanges,” which would give regulatory authority of cryptocurrencies to Iran’s central bank. This bill would give the bank the power to ban all digital currencies other than a central digital currency, and could be a strategic move by the Iranian government in preparation for a CBDC.
Nonetheless, cryptocurrency miners operating in Iran may be breathing a sigh of relief, at least for now. While China has moved forward in its blanket ban of cryptocurrencies, Iran is at least attempting to regulate and provide opportunities for crypto miners to operate in their nation.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.