Bitcoin Miners in Iran Have a New Buyer: the Central Bank

Friday 30 October 2020, 10:20 AM AEST - 4 weeks ago

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  • Iran's foreign exchange reserves are dwindling, but its oil and gas reserves give it cheap electricity.
  • The country legalized cryptocurrency mining last year but prohibited trading.
  • New regulations ask miners to sell their crypto to the central bank.

According to a report from the state-run Iranian Students News Agency (ISNA), Iran has established new regulations to funnel Bitcoin mined by Iranians into state coffers so it can use them to pay for imports.

The edict, put forth by the Ministry of Energy and Central Bank of Iran (CBI), requires the countrys legally registered cryptocurrency miners to sell the tokens they mine to CBI. The country, which has watched its foreign reserves dwindle by over 33% in two years, has increasingly eyed Bitcoin as a workaround to crippling US sanctions.

Iran's move is reminiscent of fellow petro-state Venezuela's recent decision to nationalize mining pools. Venezuela is also subject to US sanctions.

Shortly after the US pulled out of a multilateral nuclear agreement in 2018, it reintroduced sanctions on Iran that prohibited groups doing business with the Islamic Republic from also doing business with the US. Secretary of State Michael Pompeo announced fresh sanctions against 18 Iranian banks on October 8.

As a result, Iran has limited ability to use any dollars it holds in reserve. According to rumors that have percolated up into mainstream publications, Irans central bank has all but officially switched its primary reserve currency from the US dollar to the Chinese yuan and is contemplating creating its own digital currency. Taken together, the embr ...

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