Home News Proposed bill in Iran could ban all foreign-mined cryptocurrencies

Proposed bill in Iran could ban all foreign-mined cryptocurrencies

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The Iranian parliament has prepared a bill that prohibits the use of all cryptocurrencies as a means of payment within the country, except for the national one. In addition, Iranian regulators plan to prohibit the country’s citizens from storing large sums of money outside of bank accounts.

Meanwhile, Iran is planning to release its own cryptocurrency. Which probably explains why it is seeking to ban purchases in Bitcoin and other digital assets.

At the moment, the bill is under consideration.

If the document adopted in its current form, the Central Bank of Iran will begin to block the use of “unapproved” cryptocurrencies as a means of payment. At the same time, the use of cryptocurrency wallets for storing and transferring funds will not be prohibited.

There is speculation that the financial regulator wants all Bitcoin transactions in the country to be settled in the Iranian national currency, the rial.

According to the legislative proposal, the central bank will regulate the local cryptocurrency market.

“Virtual currencies can be used to launder money, support terrorism and make payments between attackers”, the CB of Iran said.

Previously, the Iranian police, which deal with cybercrime, reported that Bitcoin used to buy and sell drugs and weapons, as well as for human trafficking.

Turkey also banned cryptocurrency payments back in April due to “transactional risks”, despite the country ranking high in cryptocurrency adoption.

Iranian crypto community shocked

The country’s cryptocurrency community “shocked” by the new rules. Such a policy of the authorities will especially affect the work of business in the country. Since many enterprises carry out international settlements with their foreign partners in bitcoins.

However, these prohibitions have not yet affected the Bitcoin rate.

Local media speculate that the move is an attempt by the Iranian government to protect the rial from competition.

Tokens pegged to certain currencies, precious metals or commodities also prohibited as means of payment. At the same time, assets backed by the Iranian rial allowed, provided that they issued by the Central Bank.

Mining permissions

At the same time, the bill provides that Iranian miners will be able to obtain permits from the Ministry of Energy to open or participate in the construction of power plants. It assumed that they will be able to sell the surplus produced energy.

Thus, the Ministry of Industry, Mines and Trade will continue to control the mining industry. And issue licenses for the creation of farms for the production of cryptocurrencies.

So, last week, the ministry issued permits for 30 mining farms.

The department has been issuing permits to miners since 2020, after the government introduced compulsory registration for them. Iran recognized the mining of cryptocurrencies as an industrial activity in 2019.

However, in May 2021, the authorities banned mining until September due to power shortages. The country also reportedly hired spies from the Ministry of Intelligence last month to track down illegal mining farms that operate without a license.

Recall that earlier the central bank allowed Iranian banks and other licensed financial institutions to use cryptocurrencies to pay for imports. This applies only to digital assets mined domestically. You can also trade only with such coins, according to the decision of the regulator.

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