People dedicated to mining Bitcoin on the territory of the Islamic Republic of Iran, would be selling their coins to the Central Bank. According to information published in the state agency ISNA, the executive would have promulgated new regulations.
In this sense, the miners would receive the proposal to sell their money in Bitcoin to the Central Bank of that nation. With this, the Persian country seeks to supply itself with change capacity to buy goods abroad. It is a maneuver by the authorities to lift their weakened foreign trade.
It should be remembered that, since 2018, the United States resumed its punitive measures against Tehran. These are mainly based on sanctions and a ban on third parties, under threat, from trading with Iran.
Bitcoin mining as a lifeline for Iran
Iran’s action to buy the production of Bitcoin mining farms within its territory is a desperate action. It seeks to alleviate the burden of US commercial aggressions. The channeling of cryptocurrencies would allow the nation to import goods for its population, explains SINA.
Another important aspect to mention is that, as a consequence of the blockade, Iran’s foreign exchange reserves are depleted. The main export product of the country, oil and its derivatives, has no buyers. This is because the US considers “crime”Any type of business relationship with Tehran.
Meanwhile, Iranian oil reserves are full, which has forced them to lower production to avoid saturation. Because of this, the national currency (IRR) depreciates as a result of the scarcity of basic products that can no longer be imported.
Seeking the solution in Bitcoin mining has been Iran’s most recent step to remedy this situation.
Until recently, Bitcoin mining was persecuted by Tehran. However, it was legalized under strict government supervision, but the veto on trading with this cryptocurrency remains.
Cheap energy for miners
An important feature of the Tehran situation is that energy reserves are not exported. In this sense, they are now used for the national industry. Bitcoin mining in Iran, becomes one of the great favored by its low costs.
However, as a condition, miners must submit to certain regulations imposed by the executive. The most recent, the edict, where the Persian energy minister himself, Reza Ardakanian, asks legally registered miners, to sell all their tokens to the Central Bank of Iran (BCI).
Iran’s actions resemble those undertaken by its partner Venezuela regarding Bitcoin mining. That South American nation, in conditions similar to Iran, has been heavily hit and its economy ruined as a consequence of the punitive measures of the US in commercial and political matters.
As a possible solution, Caracas has advanced in a project to create a national pool for Bitcoin mining activities. According to article 19 of ruling 084-2020, published in Official Gazette 41,969, the affiliation of miners to that pool will be mandatory.
Sanctions are intensifying
Apart from the existing sanctions, on October 8, the US announced a new package of punitive measures against 18 Iranian banks. This prevents Iran from using any USD amount it has in its reserves.
In response, Tehran reportedly been negotiating to adopt the Chinese Yuan as the reserve currency. With this, the economy could revive with income from the international market. However, while that moment arrives, the country requires a currency to settle its operations.
The qualities of Bitcoin are a tool to avoid this type of actions by governments that control traditional finances. Although no details were offered of the amount with which the BCI will buy the Bitcoin from mining farms, everything indicates that it will not be very favorable.
Concerns in the US
The use of cryptocurrencies to avoid the effects of punitive measures is a constant concern for the United States. In this sense, that their economic aggressions, aimed at maintaining economic hegemony, have no effect, could be a “bad example” for more nations to be autonomous in their affairs from Washington.
In relation to this, in a speech in December before the Council on International Relations, the US special envoy for Iran, Brian Hook, alerted the steps of Iran. “The regime is struggling to acquire international foreign exchange, which it needs to import goods such as machinery, industrial products, and consumer goods.”.
Bitcoin mining, in this sense, would be the main source of currency for the Persian government at this time. “Miners must be willing to supply BCI directly with cryptocurrencies and under authorized limits”Concludes the report.
Data to take into consideration
- Iran’s international reserves have plummeted 33% in less than two years.
- Since the US rupture of the nuclear deal with Iran in 2018, the Persian nation has suffered significant limitations in its trade.
- Iran officially legalized Bitcoin mining in August 2019. In parallel, it prohibited trading with cryptocurrencies.
- With the supply of cryptocurrencies to the BCI, the country will have more options to import the products for its economy and population.