Iran continues to explore the potential use of cryptocurrencies as a tool to mitigate the devastating effects of economic sanctions imposed by the United States.
According to a report by the English-language Iranian economic news source Financial Tribune, the Central Bank of Iran, or CBI, allows licensed banks and forex stores to use cryptocurrency as payment for imports.
According to the regulatory framework, cryptocurrency should only come from licensed cryptocurrency workers. These mines are officially licensed by the Iranian state as an industrial activity and the operators must obtain a license from the Ministry of Industry, Mining and Trade.
According to the Financial Tribune, the Iranian government ratified the rules allowing the legal use of cryptocurrencies for imports in October 2020, on the condition that miners sell their coins directly to CBI. In fact, this strategy appears to have been around for several years now, with the 2018 report released by Iran’s Mejlis Research Center on:
“According to experts, one way to avoid the negative consequences of unfair sanctions is to use cryptocurrencies in foreign trade.”
In January this year, Shihab Javanmardi, a member of the Iranian Chamber of Commerce, Mining and Agriculture, suggested that the government use the cryptocurrency to solve trade problems in a difficult geopolitical climate. Venezuela, another country that has been hit by US sanctions, is an example of a previous attempt to use cryptocurrencies such as Bitcoin (BTC) as a payment for imports from Iran and Turkey. Javanmardi allegedly said:
Income from exporting gas and electricity cannot be recovered according to the current [American] system. Penalties]. The government can encourage the use of excess capacity or capacity generated by small businesses to expand cryptocurrencies and offset blocked resources. ”
Javanmardi suggested creating a central market, similar to the secondary foreign exchange market, through which officially recovered cryptocurrencies could be sold to Iranian companies wishing to import materials, equipment, and other goods.
Sajid Nikpour, a member of the ICCIMA Committee to Promote Non-Oil Exports, said the private sector believes that the value of cryptocurrencies to the Iranian economy applies to the trade sector and can help boost domestic production by importing raw materials. … Nikpour stressed the need to ensure transparency in such procedures. As reported in September 2020, private sector representatives have also requested the CBI to approve the use of Bitcoins to pay for car imports on Kish Island.
Despite support from the authorities, Iran’s crypto mining industry has been going through turbulent times for several years. Illegal farms were closed en masse, and local authorities were quick to blame the mining sector for the power outage in January this year, which experts at the time criticized as a scapegoat and diversion strategy.