Central Bank Of Iran Imposes Ban On Trading Of BTC And Cryptos Mined Outside Of The Country

Iran is a nation whose central bank had legalized the mining of the flagship and world’s largest cryptocurrency, Bitcoin, back in 2019. In more recent news, the country has now banned trading activities of several cryptocurrencies, including Bitcoin, which have been mined from outside of the nation’s borders. The long-term goal of taking such an action is to hopefully stop capital from leaving the country as Iran has also been subjected to numerous sanctions over the years.

Many might see this move as being little more than a formality because the country had actually already banned the open trading of cryptocurrencies before. However, there are some who would argue that this might, in fact, be indicative of Iranian regulators and their intention towards countering the removal of capital altogether from the nation.

Mining in Iran is lucrative and cheap

Due to the existence of natural gas as well as oil deposits in Iran, many have considered the country to be energy abundant, and so BTC mining there is both lucrative and affordable. As only mining BTC is legal and not the trading of it, the country has thus worked towards increasing regulations in an effort to benefit from the industry even more.

Furthermore, as a response to the crippling sanctions levied by the United States against Iran during the previous October, the country’s central bank had declared that all of the registered BTC miners have their respective tokens be sold to CBI. The primary purpose for doing this was to provide an alternative for Iran in terms of being able to pay for imports which bypassed the restrictions related to foreign currency.

Of course, this decision does not come without its problems, such as the most glaring one regarding how the country plans to make sure that ‘foreign’ Bitcoin does not enter Iran. Increased enforceability was said to not be feasible, according to attorney Fatemah Fannizadeh, as she claims enforcement on a micro-level directly concerning individual citizens would not work. Instead, the decision will enable forex offices along with banks to utilize Iranian cryptocurrency for the purposes of international transfers, she added.

SWIFT not applicable to Iran

As Iran is counted amongst the shortlist of nations where SWIFT will not function, Fannizadeh believes that the country will thus desire to have the local coins be exported much more aggressively, in addition to countering capital flight and also encouraging further mining operations. This would all be done to offset the Rial, which has been steadily depreciating in value, she concluded.

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