Late last month, Iran Daily, the official newspaper of the country’s government, reported that the administration had amended its cryptocurrency legislation to make digital assets “exclusively used for funding imports at a time of increased pressure on the country’s normal use of hard currencies.”
In practice, this means that bitcoin and other cryptocurrencies that are mined officially under government oversight will have to be supplied directly to the Central Bank of Iran (CBI) within an authorized limit, based partially on the amount of subsidized energy that the miner uses.
“The miners are supposed to supply the original cryptocurrency directly and within the authorized limit to the channels introduced by the CBI,” per Iran Daily.
The report did not clarify how the CBI would be buying the cryptocurrency or at what rate, but it is likely that the government will be buying bitcoin at lower-than-market prices.
This latest update to Iran’s policies is a key aspect of what has become the world’s most interesting cryptocurrency landscapes:
- Last year, Iran legalized cryptocurrency mining and instituted heavy-handed regulations to control the practice.
- With access to oil reserves and relatively cheap electricity, Iran can offer heavily-subsidized power to miners and offset a bulk of the cost of mining cryptocurrencies like bitcoin for firms that play by their rules.
- Alternatives to fiat currencies like the USD are attractive to the powers in Iran, as economic sanctions from the U.S. and other countries largely bar it from transacting with the world’s reserve fiat currency.
- As Iran’s rial suffers from hyperinflation, its people are seeking an alternative store of value.
To get a clearer picture of what the latest developments mean for Bitcoin in Iran, I reached out to Ziya Sadr, a Bitcoiner who lives in Tehran and has never left the country because the government “won’t give [him] a passport.” (We passed Sadr the Lightning Torch back in…