Iran can bypass sanctions with new crypto law
Important takeaways
- Iran has legalized the use of cryptocurrencies for imports.
- The law, which the Minister of Industry, Mines and Trade called comprehensive and detailed, includes new regulations around cryptomining.
- The country has been subject to severe sanctions since 1979 and previously relied on the US dollar and euro for trade.
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Iran’s Minister of Industry, Mining and Trade, Reza Fatemi Amin, has declared that the government’s new cryptocurrency law will enable Iranian businesses to use crypto instead of US dollars or euros to import goods.
Iran enables international crypto payments
Iran is moving ahead with its plans to enable cross-border cryptocurrency payments.
Iran’s Minister of Industry, Mines and Trade Reza Fatemi Amin announced Sunday in an automotive industry exhibition in Tehran that the government had passed a comprehensive and detailed law to regulate the use of cryptocurrencies for trade.
“All issues related to crypto-assets, including how to supply fuel and energy [for mining]and how to assign and grant licenses was developed,” Amin said. The law, crafted between the Ministry of Industry and Iran’s Central Bank, will allow imports to be paid for using cryptocurrency. The law will apply not only to Iran’s financial institutions and industry leaders, but also to local businesses .
Iran previously relied solely on US dollars and euros for cross-border payments. The country has been subject to US sanctions since 1979; the sanctions grew to become some of the toughest in the world after Iran’s refusal to halt its uranium enrichment program in 2006. Local newspaper Iran International expect that cryptocurrencies will be used to circumvent the sanctions and enable trade with other blacklisted countries such as Russia. Russia’s central bank already has indicated it was open to the idea of using cryptocurrencies for international payments.
August 9, Iran’s Deputy Minister of Industry, Mining and Trade, Alireza Peyman-Pak, declared that the country had processed its first import using cryptocurrency. The order was worth $10 million. Peyman-Pak also stated that “the use of cryptocurrencies and smart contracts will be widespread in foreign trade with target countries” by the end of September.
Iran has also been attractive to Bitcoin miners due to its cheap electricity. The Iranian government officially made Bitcoin mining legal in 2019, with the caveat that mining rigs must be turned off “during peak consumption times.” The policy is similar to it adopted of Texas regarding its own mining industry.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
