Iran prohibits the use of cryptocurrencies in payment transactions

In connection with the suppression of cryptocurrencies by mining in China and the increasing tightening of regulations by the countries, the Iranian legislature drafted a bill entitled “Supporting Cryptocurrency Mining” and organized the domestic market for the exchange. This Iranian bill would ban the use of cryptocurrencies in payments across the country.

Iran prohibits the use of cryptocurrencies in payment transactions

Iran prohibits the use of cryptocurrencies in payment transactions

As the Tasnim news agency reported on Friday, the Iranian central bank will oversee the local cryptocurrency market and also regulate cryptocurrency exchanges in Iran if the new law is passed.

Meanwhile, Iran intends to issue its own sovereign cryptocurrency, presumably a crypto rial. This explains why the country prohibits payments in cryptocurrency for goods and services.

Similarly, the Central Bank of Turkey also banned crypto payments in April, citing the risk of “irrecoverable loss” associated with the high anonymity of accounts.

Iran bans cryptocurrency in payments, but licensed crypto miners can sell excess electricity

Mining cryptocurrencies has been legal in Iran since 2019, as long as miners operate according to government-approved rules. In May, however, Iranian President Hassan Rouhani announced an immediate ban on Bitcoin mining in the country for 4 months until September 22, to ease pressure on the national electricity grid and prevent the situation from deteriorating. The country reportedly recruited intelligence ministry spies last month to hunt down illegal mining farms that are operating without a permit.

President Rouhani pointed out that cryptocurrency mining, 85% of which is unlicensed and illegal, is consuming more than 2 GW from the network every day. Subsequently, the Iranian police recently confiscated more than 7,000 oil rigs from a mining center in Tehran.

Iran’s bitcoin mining embargo comes shortly after China’s ban on cryptocurrency mining. However, things are looking promising again for miners in the Islamic Republic of Iran. With the proposed new bill, the Department of Industry, Mining and Trade will issue licenses to cryptocurrency miners who want to set up mining centers.

The Iranian bill stipulates that cryptocurrency miners must obtain a license from the Ministry of Industry, Mining and Trade to set up mining farms.

Last week the ministry approved 30 mining companies.

The proposed law also provides that miners can also register to participate in the construction of power plants and sell excess electricity.

Iran will help miners increase government revenue by $ 500 million a year from March 2022.

Licensed mining farms that control power plants can register with the country’s Department of Energy to participate in the construction of additional power plants, and they are also allowed to sell excess electricity generated in their factories.

In particular, the Iranian Ministry of Industry, Mining and Trade recently issued operating licenses for 30 crypto mining farms in the country.

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