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Iranian Gov’t Officially Approved Bitcoin As U.S. Sanctions Weaken Economy2 min read

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The Iranian government endorsed crypto mining as an industrial activity and noted that those involved should take required licenses from the Ministry of Industry, Mine and Trade.

According to the decision, those who use cryptocurrencies should accept its risks and the government and banking system will not provide any guarantees for them. It also notes that using digital money in domestic transactions is not allowed.

Crypto mining, like other industrial activities, is taxable unless individuals export cryptocurrencies and bring back the revenues to the country, highlights the decision.

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This is deemed the first step to legalize cryptocurrencies in Iran. Many experts believe that cryptocurrencies can be used as a means to mitigate the effects of US-imposed harsh economic sanctions against Iran.

Earlier before, the Iranian government had disproved cryptocurrency mining for its potential misuse of subsidized electricity. It later ordered the law enforcement agencies to crack down on illegal bitcoin mining farms. The police, in response, confiscated thousands of dollars worth of mining machinery.

Low-price electricity has encouraged many to mine cryptocurrencies in the country; even some reports indicate that miners from other countries such as China are establishing farms in Iran. The government is yet to approve the final price rate for miners. According to reports, the government is likely to set the exported rate for mining farms which would be around 7 cents per kilowatt-hour; currently the rate is around 2 cents.

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The US, meanwhile, is increasing its crackdown on the regional cryptocurrency industry, including the arrest of two Iranian men for allegedly extorting bitcoins via a ransomware attack. Treasury Secretary Steven Mnuchin on July 15 called bitcoin “a national security threat,” citing its use in money laundering and terrorist financing.

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Tensions between the US and Iran have further escalated after they shot down each others’ drone. The former issued a threat to carry out airstrikes. The US President Donald Trump later ordered troops to not go ahead with the attack.

 

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