Iran’s Central bank banned trading of foreign-mined BTC coins with the ultimate goal being to prevent capital from leaving the country as we can see more in our latest Bitcoin news.
Iran’s central bank banned the trading of these coins but legalized BTC mining in 2019 and mandated that the registered miners sell their earnings to the bank. The CBI prohibited the trading of all cryptos that are mined outside of the country according to a report from the news outlet Iran International. At first glance, the move is a formality as the country already had effectively banned open trading of crypto but it could signal the intent of Iranian regulators to counter the removal of the capital from the country.
Iran's central bank has declared that transactions of cryptocurrencies which were mined outside of Iran are forbidden – in Iran, one can only transact with locally mined coins! https://t.co/YuOwdIkPG5
— Meh (@Fatalmeh) May 6, 2021
Gas deposits and oil make Bitcoin mining in the country quite cheap and lucrative so since legalizing crypto mining in 2019, the country looked to regulate the entire industry to its advantage. Last October, Iran looked to avert the US sanctions that were launched during the Trump administration with the Central Bank mandating that registered BTC miners in the Country sell mined tokens to the Central Bank. The move gave the country a new way to paying for imports that bypass foreign crypto restrictions.
This week’s ban came with some logical hurdles like how one can ensure that foreign coins stay out of Iran. Attorney Fatemah Fannizadeh suggested enforceability among the individual holders isn’t the goal as she tweeted:
“I don’t think it will be enforced on an individual level. Exchange platforms can basically not operate. But instead of a blanket ban, it allows banks and forex offices to use Iranian crypto for international transfers.”
The last part is crucial as Iran is one of the very few countries that are locked out of SWIFT as an international network for transferring money with the others being North Korea, Syria, Sudan, Cuba, and the Crimea region in Ukraine, as Fannizadeh wrote:
“This just means that Iran wants to export Iranian produced coins more aggressively, encourage mining, and counter capital flight in the face of a depreciating Rial.”
The rial lost 80% of its value back in 2017 and at the start of this year as well. During that same time, Bitcoin’s value increased by 3800%.
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