Iran has approved legal cryptocurrency mining for the first time, according to reports emerging from a local business organization.
The Iran Chambers of Commerce, Industries, Mines and Agriculture has this week reported that the government has approved cryptocurrency mining. It is now searching for regulatory mechanisms within existing laws.
The Central Bank of Iran governor Abdolnaser Hemmati said the government has already approved the practice of mining digital currency. This was announced ahead of a cabinet discussion on the matter later in the week.
Ministers are also expected to meet separately to discuss a specific electricity rate for crypto mining facilities. This is in a bid to encourage more mining within Iran’s borders.
The news represents something of a U-turn from the Iranian authorities. In recent months, it has closed down two mining facilities.
Similarly, senior government officials are on record as having said that the government should not subsidise the cryptocurrency sector. That’s despite Iran’s appeal as a low energy cost destination.
Plans were also reportedly under consideration to ban cryptocurrency for domestic payments. However, it remains unclear whether this policy will now proceed as intended.
The developments for the cryptocurrency sector in Iran come off the back of escalating tensions between the country and the United States.
Tensions between Iran and the UK in recent weeks have also scaled to new heights. The British have described their captured ship by Iranian authorities as a breach of international law.
Iran is trying to shore up its finances by embracing cryptocurrency mining and digital currencies in general. The situation has become more desperate with economic sanctions expected to continue to ratchet up over the coming weeks and months.
As with states like Venezuela, which has issued its own cryptocurrency to evade international sanctions, there are now fears Iran could be heading down a similar path.
Operating outside of mainstream payment networks and financial systems, cryptocurrency could provide Iran with access to foreign reserves. It could also help fund essential trade while evading US-led economic sanctions.
The developments show the flexibility of cryptocurrencies for international payments. All the while whilst posing challenges for those that seek to enforce economic sanctions against the Iranian state.