After closing several illegal mines, Iran issued licenses to miners according to the new regulatory framework
Specific sources pointed out that the Iranian government approved a set of "comprehensive and detailed" encryption regulations at a meeting last week, including provisions on crypto mining. According to local media reports, Reza Fatemi Amin, Iran's minister of industry, mining and trade, said that his department has now been approved to resume issuing crypto mining licenses. He was quoted as saying: according to government regulations, entities applying for mining crypto assets can obtain establishment licenses and operation licenses.
An entity needs a pair of licenses before it starts mining cryptocurrency in Iran: an establishment license and an operation license. The former establishes the entity as a legal crypto miner, while the latter allows it to actually start crypto mining.
In addition, Mohsen Rezaei sadrabadi, Secretary of the government cryptocurrency working group, shared some details of the newly approved cryptocurrency regulatory framework, saying that mining centers can now apply for a license and use the mined cryptocurrency to pay for imports. He explained that the Ministry of industry, mines and trade is responsible for issuing licenses to crypto miners, adding that the new regulatory framework has provisions for large-scale crypto mining operations. There are also provisions on the supply of energy to the mining industry, giving priority to renewable energy.
In addition, Rezaei sadrabadi pointed out that the government has decided to make the central bank the main regulator of the crypto industry. However, he believes that crypto regulation should be multidimensional, and one regulator should not supervise the whole industry, because the crypto ecosystem does not only contain cryptocurrencies.
In 2019, the Central Bank of Iran banned crypto transactions in the country, but the government legalized crypto mining as an industry. Subsequently, a regulatory framework was established, requiring crypto miners to obtain a license, prove their identity, pay higher electricity bills, and sell the bitcoins they mined directly to the government. In July, Iran amended some regulations to make renewable energy more accessible to crypto miners.
In December last year, the Iranian government ordered licensed cryptocurrency miners to temporarily stop operation due to the impact of extreme weather on the country's power grid in cold months. The state power company then announced a four month ban on crypto mining in May, but lifted the ban in mid September after licensed crypto mining facilities voluntarily shut down their operations to reduce the power burden.
Iran has issued more than 1000 crypto mining licenses under the previous regulatory framework. The Iranian authorities revealed in May that nearly 6914 illegal crypto mines had been closed. Tavanir, an Iranian power generation, distribution and transmission company, claimed that Iran's illegal cryptocurrency mining accounted for nearly 85% of the industry's power consumption. It has threatened to take strict measures against unauthorized crypto miners and has seized nearly 10000 illegal mining equipment since March.
It is worth mentioning that although cryptocurrency transactions were banned in 2019, the Iranian government is now ready to widely use cryptocurrencies for international trade payments by the end of September. It is reported that Iran has been sanctioned by the United States for many years. The sanctions mainly target Iran's finance and banking industry, which also hinders most of the country's international business. Iran's trade minister Reza Fatemi Amin said on Monday that the government has finalized the rules on using cryptocurrency to pay for imports. Earlier, in early August, Iran conducted its first trial run and purchased a batch of cars worth $10 million, which were paid in cryptocurrency.
Bitcoin magazine said on social media that Iran's Deputy Minister of trade said that bitcoin and cryptocurrency would be widely used in foreign trade before September.
Earlier, the Iranian Importers Association stressed that since the Iranian government officially uses cryptocurrency to pay for imports, it needs a stable regulatory framework for cryptocurrency. The chairman of Iran importers group and representative of foreign companies (import Association) said that a stable regulatory framework for cryptocurrency should be established so that cryptocurrency can be successfully used as a means of import payment. Managhebi pointed out that with the proper regulatory infrastructure, cryptocurrencies may be useful in this regard. The main question is whether the Iranian government has formulated fixed rules for the use of cryptocurrency that will not change in a few months, and at the same time, enterprises active in this digital field will not be harmed.