Cryptocurrency News, Cryptocurrency Regulation

Iran’s Central Bank Governor Reiterates Illegality Of Crypto Trading And Investing

Businesses and citizens were recently reminded by the head of the monetary authority in Iran that buying and selling cryptocurrencies in the country is illegal.

The governor of the Iranian central bank noted that it was permitted to mine cryptocurrencies and use them to pay for imports in the Islamic Republic.

Crypto regulations

Ali Salehabadi, the Governor of the Central Bank of Iran (CBI) recently told local media that it is prohibited to buy and sell crypto, or to use these digital assets for investment purposes.

However, he added that authorized entities and individuals were legally allowed to mine cryptocurrencies that would be used for making international settlements.

The CBI chief was referring to the crypto regulations that the bank had adopted two years ago, along with other government institutions, including the Ministry of Industry, Trade, and Mine.

He elaborated that the law permitted Iranian companies to use cryptocurrencies to pay for imports. His comments came after the announcement from Alireza Peymanpk.

The Deputy Minister of Trade announced the country’s first import order that had used crypto as a means for payment.

The head of the Trade Promotion Organization of Iran, the government representative disclosed that the country had used digital coins for purchasing goods worth $10 million.

No crypto payments in the country

However, it should be noted that Iranian authorities are not in favor of the use of crypto within the Islamic Republic.

Earlier this year, Reza Bagheri, the Deputy Minister of Communications, had also dashed any hopes of crypto payments being permitted.

The government does not tolerate crypto investing and trading either and only licensed moneychangers and banks are allowed to use crypto mining in the country to pay for imports.

The authorities in Tehran had declared crypto mining a legitimate industrial activity in 2019 and licenses had been issued to several enterprises for minting crypto assets like bitcoin.

Energy shortage

However, there have been consequences of crypto mining for Iran, as it was blamed for the rise in electricity shortages as well as blackouts, particularly during the summer season.

This is because consumption rises in the hot summer months for cooling purposes, along with the winter months, for heating purposes. Crypto mining is an energy-intensive activity, hence the blame.

This prompted the Iranian government to order crypto mining farms to shut down their operations on several occasions in the last two years.

Meanwhile, Tavanir, the country’s utility company, went after illegal mining enterprises and shut down thousands of crypto farms that were running underground.

These illegal setups mostly use the subsidized electricity provided in residential areas. The utility said last month that it would take severe steps against those engaging in unauthorized mining.

Iranian officials have claimed that one bitcoin mining machine consumes the electricity generated for 24 households.

Governor Salehabadi also talked about the plans of the central bank to introduce a ‘crypto rial’. This is their version of a central bank digital currency (CBDC), which is aimed at partially replacing paper money.

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