Iran Does Not Recognize Crypto Transactions

Iran, like many countries In the world, has been trying to determine its place within the blockchain sector and also has been trying to put in place definite regulations to both accommodate and regularize the industry as it sees more growth within the nation. Recently, there was the issue of crypto mining within the country as several crypto miners were taking advantage of subsidized electricity rates by tapping into the national grid for the mining of crypto and this led to their energy minister threatening to cut them off.

Now the Union government has made some progress in establishing new laws and it was reported on August 4, 2019, that they have instituted a new law that unfortunately, does not accept cryptocurrency as legal tender and also does not recognize crypto transactions within the country.

Crypto is not a legal tender

The cabinet of Iran ratified and released the new bill on August 4, 2019, and the state government will not recognize any domestic trading activities that involve cryptocurrency. Also, the government and the banking system will not view digital currency as a form of legal tender and the Iranian Central Bank will not guarantee their value.

This comes not long after the deputy governor of the Iranian Central Bank stated that buying and selling digital currencies was illegal within the country. 

Cryptocurrency has been a bit of a mixed bag within Iran as the country has previously seen the rise of crypto mining as an industrial activity and has created a permit scheme to regularize it, Miners must get approval from the Iranian ministry of industry and trade and also follow some requirements with regards to the setting up of their mining facilities that must be outside a 30 kilometer perimeter of all provincial centers in the country.

The mining problem

Also, miners are being charged for using energy on specific prices that are separate from those that apply to the national grid. It was also stated by the deputy president of the Islamic Republic of Iran Customs administration that the agency has not issued any licenses for importing mining equipment into the country and this creates another grey area as not only is mining equipment not legally allowed to be imported but now cryptocurrency use itself does not receive any recognition from the government.

This leaves crypto miners in a situation where their only income source would be to sell cryptocurrencies to those outside Iran even as better regulations are being advocated for within the country.