Iran Gives Greenlight To Cryptocurrency Mining

Authorities in Iran have started recognizing cryptocurrency mining as legal in the country at a time when there has been growing pressure as a result of economic sanctions by the U.S.

Iran is, therefore, shifting towards the cryptocurrency market in order to try and ease the effects of economic sanctions. Regulators in the country including the Central Bank of Iran have started to acknowledge the cryptocurrency mining industry as legal. In fact, the Central Bank is planning to come up with a policy framework for governing the industry within 18 days. 

“Mining of cryptocurrencies like Bitcoin had "been accepted as an industry in the government and all related organizations,” stated Abolhassan Firouzabadi, the Supreme Council of Cyberspace in Iran.

The announcement has reportedly fueled the price of Bitcoin with the exchange rate reaching 102,000,000 Tomans which is equivalent to $24,000 in Iranian crypto exchanges. This is significantly higher than the current price of the currency which is slightly above $7, in the global market.

This is one of the many questions that are being asked regarding Iran’s decision to allow cryptocurrency mining at a time when the country is looking for ways to improve the economy after U.S sanctions. The U.S recently threw out a nuclear deal that it made with Iran during Obama’s administration. The new sanctions are also expected to slash oil sales from the Middle Eastern county.

Iran’s efforts of using cryptocurrency make it the second country to attempt to restore its economy through cryptocurrency after Venezuela’s attempts which involve a native oil-backed currency called Petro. The Iranian Rial has been growing weaker against the U.S dollar and is currently causing contention as U.S President Donald Trump Encourages European markets to exit the country.

Iran is getting closer to hyperinflation and thus the government is tasked with coming up with measures that could help restore the financial situation. It is not clear whether cryptocurrencies will be the Hail Mary that the country is looking for but it looks like Iran wants to become a cryptocurrency haven. The announcement could end up attracting cryptocurrency miners especially if energy rates are affordable.  The legalization of cryptocurrency mining also means that the country will most likely allow the use of digital currencies as payment. This would also help users to avoid inflation.