Iran Changes Law to Use Bitcoin For Imports

Thursday 29 October 2020, 9:06 PM AEST - 4 weeks ago

Central Bank of Iran

Iran has become the first country in the world to use cryptocurrencies at a state level for value exchange.

The Iranian Cabinet has amended legislation to redirect cryptos into the Central Bank of Irans funding mechanisms for imports, according to a Saturday report by the official IRNA news agency.

The miners are supposed to supply the original cryptocurrency directly and within the authorized limit to the channels introduced by the CBI, said the report by CBI and the Ministry of Energy.

The legal cap for the amount of cryptocurrency for each miner would be determined by the level of the subsidized energy used for mining and based on instructions published by the Ministry of Energy.

Iranian money has drastically fallen in value with inflation there at 34%, a situation that has been continuing since 2018.

The country is in the grip of US sanctions, so they can not use dollars for international trade.

They are therefore turning to bitcoin, the first country to do so at a state level, with the famous bitcoin volatility less of a consideration here because the situation is desperate.

Irans economy has been contracting for much of last year and this year at circa -10% a quarter, making this a depression.

However, after some experimentation with cryptos starting in 2018, it appears Iran has found a use case in both creating economic value through facilitating crypto mining, and now in using bitcoin for international trade.

For months we have suspected this was their strategy. Now it is in black and white: Iran is bypassing the dollar and other fiat currencies by using bitcoin.

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