Iran Could Circumvent Sanctions With New Crypto Law
The Iranian government has passed a comprehensive and detailed law regulating the use of cryptocurrencies for international trading purposes.
Key Takeaways
- Iran has legalized the use of cryptocurrencies for imports.
- The law, which the Minister of Industry, Mine, and Trade called comprehensive and detailed, includes new regulations surrounding crypto mining.
- The country has been the subject of severe sanctions since 1979 and was previously reliant on the U.S. dollar and the euro for trade.
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The Iranian Minister of Industry, Mine, and Trade, Reza Fatemi Amin, has declared that the government’s new cryptocurrency law would enable Iranian businesses to use crypto instead of the U.S. dollar or the euro to import goods.
Iran Enables International Crypto Payments
Iran is forging ahead with its plans to enable cross-border payments with cryptocurrency.
Iranian Minister of Industry, Mine, and Trade Reza Fatemi Amin announced on Sunday at an automotive industry exhibition in Tehran that the government had passed a comprehensive and detailed law to regulate the use of cryptocurrencies for trade.
“All the issues related to crypto-assets, including how to provide fuel and energy [for mining], and how to assign and grant licenses were devised,” stated Amin. The law, crafted between the Ministry of Industry and Iran’s central bank, will allow imports to be paid for using cryptocurrencies. The law will apply not only to Iran’s financial institutions and industry leaders but to local businesses as well.
Iran previously relied solely on the U.S. dollar and the euro for cross-border payments. The country has been the subject of sanctions from the United States since 1979; the sanctions grew to be some of the most severe in the world following Iran’s refusal to halt its uranium enrichment program in 2006. Local newspaper Iran International expects cryptocurrencies will be used to circumvent the sanctions and enable trade with other blacklisted countries such as Russia. Russia’s central bank has already indicated it was open to the idea of using cryptocurrencies for international payments.
On August 9, Iran’s Vice Minister of Industry, Mine, and Trade, Alireza Peyman-Pak, declared that the country had processed its first import using cryptocurrencies. The order was worth $10 million. Peyman-Pak also stated that “the use of cryptocurrencies and smart contracts will be widespread in foreign trade with target countries” by the end of September.
Iran has also been attractive to Bitcoin miners due to its cheap electricity. The Iranian government officially made Bitcoin mining legal in 2019, with the caveat that mining rigs need to be turned off “during peak consumption times.” The policy is similar to the one adopted by Texas regarding its own mining industry.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
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