Iran has become the first country to constitute Bitcoin as legal means of exchange within its jurisdiction. The move comes following renewed waves of US sanctions.
Following new sanctions by the United States Treasury Department earlier this week, Iran now hopes to use Bitcoin for cross-border settlements, local media reported Thursday.
The Iranian government amended its crypto regulations so that miners can redirect cryptocurrencies to Iran’s finance mechanism for international trades as the country’s fiat currency continues to suffer from both the US sanctions and the coronavirus pandemic. Iran Wants Only Legally Mined BTC
The amended legislation was a joint proposal by the Central Bank of Iran (CBI) and the Iranian Ministry of Energy, Iran Mail wrote, citing a report from The Islamic Republic News Agency (IRNA).
The regulation stipulates that only legally mined cryptocurrency in Iran will be used for financing imports from other countries. This means that crypto miners are obligated to sell mined BTC directly to Iran’s central bank.
“The miners are supposed to supply the original cryptocurrency directly and within the authorized limit to the channels introduced by the CBI,” the report said.
The legal cap for each miner would be based on the level of subsidized electricity they consume in their mining operations and instructions from the Ministry of Energy.
Bitcoin trading was illegal in Iran until August 2019, when the government released a regulatory framework for cryptocurrencies. Since then, the country has kept an open mind towards cryptocurrencies. The government even provided exclusive energy for miners to encourage crypto mining operations while also discouraging illegal mining.
After issuing more than 1,000 licenses for bitcoin and crypto mining gear in January, the government announced last month that it is offering three power plants to miners in the country. Evading US Sanctions
With the US dollar acting as a vehicle currency in the global market, Iran believes using bitcoin will help them boycott all the restrictions imposed by the Trump administration.
This makes Iran the first country in the world to officially declare bitcoin as an international medium of exchange. Meanwhile, other countries are hard at work researching or developing a central bank digital currency.
#1: Lod To: Pinguinite, Ada, 4m (#0)
Lod posted on 2020-10-30 08:51:08 Reply Private Reply
#2: Pinguinite To: Lod (#1)
In this case, it seems Iran is interested in spending bitcoin more than receiving it, and to do so they will accept bitcoin mined within Iran and that bitcoin must be mined "legally". Illegal mining might be mining that uses subsidized electricity or some such, but in this case, electricity for mining IS subsidized which I guess gives their gov the moral right to require it all be sold to the gov. Certainly it suggests the bank gets to set the price they pay.
This is big for bitcoin, and crypto in general as it seems to be the first time a country has officially declared bitcoin as acceptable for international transactions. If Iran starts accepting bitcoin for oil, which seems should be next, and other countries follow suit in either accepting or paying in crypto, then it could be a "hold on to your hats" type event.
Pinguinite posted on 2020-10-30 10:36:27 Reply Private Reply
#3: BTP Holdings To: Pinguinite (#2)
And you know what the U.S. did to Saddam for accepting Euros in payment for oil. In the end he was hung. ;)
BTP Holdings posted on 2020-10-30 10:40:35 Reply Private Reply
#4: Pinguinite To: BTP Holdings (#3)
Iran does not border any country that would be very willing to serve as a staging area for an invasion as Saudi Arabia was when invading Iraq, and a Normandy style landing would be more costly in US lives than the American public would tolerate. The place is also 3x bigger than Iraq and has a population about 20% of that of the USA. Iran is also a lot more advanced than Iraq was militarily, yet still with all the Islamic fervor with people willing to die attacking the Great Satan.
So, an invasion of Iran is, IMO, out of the question.
Pinguinite posted on 2020-10-30 11:00:38 Reply Private Reply