Wednesday, June 19, 2024
ReportIran ratifies cryptocurrency bill banning trading but legalizing mining

Iran ratifies cryptocurrency bill banning trading but legalizing mining

Following our report on Iran considering to legalize crypto-mining and leveraging on digital currencies to escape the debilitating sanctions imposed by the US, the Iranian government this past week has ratified a bill seeking to set regulatory parameters for cryptocurrencies.

The new regulation which allows for the mining of cryptocurrencies (although within certain limitations) as expected, however, outlaws the trading of digital currencies. According to government-affiliated Press TV, cryptocurrencies will not be recognized as legal tender and their value would not be guaranteed by the Central Bank of Iran. Once the bill comes into effect, interested parties, including the Iran Fara Bourse which is looking to work with technopreneurs on security and asset token offerings, will need to navigate within the new framework.

The Cabinet has agreed to legalize the mining of digital currencies in Iran, provided that each miner secure the approval by the Iranian Ministry of Industries and Mines. Farms are also not allowed to be within a 30km radius of all provincial centers except for the capital of Tehran and the central city of Esfahan, where stricter rules apply. Miners will be charged a fee for energy – electricity or natural gas used to generate electricity – utilized in the mining process.

The Islamic Republic, which adopts a fully-fledged Shariah compliant financial system, has also been decided that mining farms would be taxed in the same manner as any industrial manufacturing entities, unless the profit earned from the export of digital currencies is channeled back into the Iranian economy.
These set of restrictions may not necessarily apply to foreign entities intending to establish mining farms in special economic zones as the ministry will have the option to devolve its powers to relevant authorities in these zones.


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