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Iran's Recognition of Crypto Mining Prompts Local Bitcoin Price Spike

The Iranian government has recognized cryptocurrency mining as a lawful activity as part of its effort to introduce a national cryptocurrency – a move that saw bitcoin’s price briefly spike to record levels on local exchanges.

According to news agency IBENA, which is affiliated to the Central Bank of Iran, Abolhassan Firouzabadi, the Secretary of Iran’s Supreme Council of Cyberspace stated on Tuesday that cryptocurrency mining “has been accepted as an industry in the government.”

Further, the official said the decision was arrived at after consensus among other relevant government agencies such as the Ministry of Communications and Information Technology, the Central Bank and the Ministry of Economic Affairs and Finance, although a final policy legislating for the activity hasn’t been declared as yet.

The move to recognize cryptocurrency mining comes as the country is taking efforts to create its own central bank digital currency as a means to bypass the U.S. economic sanctions recently reimposed by President Trump, as previously reported by CoinDesk.

Firouzabadi added that a national cryptocurrency remains a “promising” tool to facilitate financial transactions with Iran’s trade partners, as the Trump administration has restricted the country’s access to U.S. dollars.

With regard to cryptocurrency trading activities, the official further said “a decision-making authority will declare the framework and final policies for trade and participation of startups and trade activists in the cryptocurrency sphere by September but no definitive decision has been taken yet.”

CoinDesk also reported in July that cryptocurrency investors in Iran then appeared to be facing restrictions from the state, with users being blocked from accessing accounts at exchanges such as Binance, even if using virtual private networks or VPNs.

Following the country’s recognition of crypto mining, reports indicate that the price of bitcoin on some local exchanges such as Exir peaked to over $24,000 – exceeding the global average all-time high of $20,000 seen in December – while prices elsewhere yesterday were around $7,000.

Data from CryptoCompare backs up the reports, indicating that OTC trading prices on LocalBitcoins briefly reached as high as $25,000.

Azadi Tower, Tehran, image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Iran Said to Bar Banks from Bitcoin Market

Iran’s financial businesses should not deal in bitcoin or other cryptocurrencies, according to the country’s central bank and one of its principal market regulators.

Fearing the possible illicit use of cryptocurrencies in money laundering and terrorist financing, the Central Bank of Iran (CBI) sent out a circular on Sunday to prohibit the use of the technology within financial institutions, the country’s national news agency reports. The announcement, made public yesterday, was passed by Iran’s anti-money laundering body in December, 2017.

The publication warns:

“Virual currencies have the option to be used for money laundering, supporting terrorism, and exchange of sums between wrongdoers.”

According to the report, banks, credit institutions and currency exchanges must now avoid the sale or purchase of cryptocurrencies, as well as taking any action to promote them.

Still, it remains unclear to what extent the central bank is able to block domestic cryptocurrency activities given both the availability of the technology and the supportive views held by some public officials.

The country’s Information and Communications Technology Minister, for example, revealed in February, that Iran’s central bank is developing a cryptocurrency that would be administered by the state government.

In comments from last November, the secretary of the Iran’s cyberspace authority went so far as to say the nation “welcomes” bitcoin, provided there are proper regulations.

And earlier, Central banker Naser Hakimi, deputy director of new technologies, made remarks in November that the central bank is studying bitcoin and that it plans a comprehensive review of its policies in this area. His statements however, were focused on the “uncertainty” and “risk” brought about by cryptocurrency speculation in the market.

Iran map image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.