Iranian central bank bans foreign-mined bitcoin transactions

Iran International reported that the Iranian Central Bank (CBI) has banned cryptocurrency transactions, including bitcoin mined outside the country. This was reported by Decrypt on the 7th (local time).

At first glance, this is a formal action, as Iran has already effectively banned open cryptocurrency transactions. However, it may indicate the intention of Iranian regulators to prevent capital outflows from Iran.

It makes bitcoin mining a relatively inexpensive and profitable place in Iran, which is rich in energy from oil and gas reserves. Iran has been looking for ways to favorably regulate its own industry since it legalized cryptocurrency mining (but not trading) in 2019.

In October of last year, as part of an effort to prevent US economic sanctions, it was mandated to sell tokens mined by bitcoin miners registered in Iran to the Iranian Central Bank (CBI). This measure would allow the state to replace payments for imported goods, avoiding foreign currency regulations.

Attorney Fatemah Fannizadeh suggested that enforceability among individual owners may not be the goal.

“I don’t think it will be implemented on a personal level. The exchange platform does not work by default. However, instead of a full ban, it allows banks and foreign companies to use Iranian cryptocurrencies for international remittances.

Iran is one of the few countries where SWIFT, an international money transfer network, has been blocked. Other countries are Cuba, North Korea, Syria, Sudan, and the Crimea of ​​Ukraine.

“It means Iran wants to more actively export and encourage mining of its own coins and respond to capital runaway against the decline in the value of the rials,” said Fannizadeh attorney.

The rial lost 80% of its value against the dollar from January 2017 to January 2021. During the same period, the value of Bitcoin increased by more than 3,800%.

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