Crypto Regulations in Iran
Iran’s Ministry of Energy has changed certain crypto mining regulations to ease access to renewable power for entities authorized to mint digital currencies in the Islamic Republic.
A recently issued decree relieves miners from the obligation to use on-site power generation capacities and permits them to buy electricity from renewables from across the country and through the national grid, Bargqnews unveiled.
Until now, mining enterprises could only sign contracts with renewable power plants located in the same province, pointed out Mohammad Khodadadi, an official at the Iran Power Generation, Transmission and Distribution Company (Tavanir).
Quoted by the English-language business news daily Financial Tribune, the report also revealed that Iranian firms mining legally with clean energy will not be charged the regular transmission fees for using the country’s electricity network.
Source: News Bitcoin
Cryptocurrencies like bitcoin will not be treated as legal tender in the Islamic Republic of Iran. Discussing regulatory matters related to the storage and exchange of cryptocurrencies, Iran’s deputy minister of communications, Reza Bagheri Asl, emphasized:
“We do not recognize payments with cryptocurrencies.”
Source: News Bitcoin
In 2018, Iran recognized cryptocurrency mining as a legal industry in order to monitor and regulate the mining farms that were already operating. In July 2018, President Hassan Rouhani‘s administration declared its intention of launching a national cryptocurrency, a news agency affiliated with the Central Bank of Iran outlined multiple features of the national cryptocurrency, stating that it would be backed by Iran’s national currency, the rial.
Source: Wikipedia
Iran officially recognized crypto mining as an industry in recent years, offering it cheap power and requiring miners to sell their mined bitcoins to the central bank. The prospect of cheap power has attracted more miners, particularly from China, into the country. Teheran allows cryptocurrencies mined in Iran to pay for imports of authorized goods.
“Iran has recognized that bitcoin mining represents an attractive opportunity for a sanctions-hit economy suffering from a shortage of hard cash, but with a surplus of oil and natural gas,” the study finds.
Source: Reuters
The government official was commenting on the latest resolution by the Digital Economy Working Group regarding crypto assets. He pointed out that the use of any foreign currency is outside the sovereignty and against the monetary and banking law of Iran.
“So, we will by no means have any regulations recognizing payments with cryptocurrencies that do not belong to us,” Bagheri Asl elaborated, quoted by the Iranian financial news portal Way2pay. “Iran has its own national cryptocurrency, so no payments will be made with non-national cryptocurrencies,” he insisted.
Source: News Bitcoin
The Iranian National Tax Administration (INTA) has put forward a proposal to tax digital asset exchanges operating in the country. The authority calls for the legalization of their activities, fearing restrictions could negatively affect tax collection.
Iran’s tax agency has prepared three tax regimes that can be applied to digital currency trading platforms – “tax on capital gain, fixed base tax, and occupational tax,” the English language news outlet Eghtesad Online detailed. The proposal does not elaborate on the precise taxing mechanisms for exchange operators.
Another key element concerns decentralized digital asset exchanges. Iranian tax officials want to introduce a cap on the transactions that can be processed through this kind of platform, in line with existing anti-money laundering regulations in the Islamic Republic.
If the Iranian government accepts the tax authority’s proposal and suggestions, cryptocurrency trading will join mining and become another regulated bitcoin-related activity. In 2019, Tehran recognized the minting of digital coins as a legal industry and soon after, the INTA introduced rules for the taxation of miners.
Source: News Bitcoin
Seeing an opportunity to use exchange transactions as a basis for taxation, the INTA has urged regulators in Tehran to legalize crypto trading platforms. In an excerpt from its draft proposal quoted by Iranian media, the tax authority insists:
“Legalizing crypto exchanges is necessary [for levying tax]. Legal operations must be limited to authorized exchanges that are allowed to convert currency while keeping track of transactions.”
Source: Cointelegraph
The Iranian Central Bank127 has authorized banks and currency exchanges to use cryptocurrencies mined by licensed crypto miners in the county. Although mining is legal, the country takes a heavy-handed approach requiring firms to sell cryptos to the central bank to fund imports. The country has issued more than 1,000 licenses to crypto miners and shut down unlicensed firms. Trading outside the country has been banned, to stop capital flight. The use of cryptos for payments has also been banned. In early 2022, the country said128 it was exploring the possible use of cryptos for international trade, which potentially would allow some businesses to make international payments using cryptos.
Source: Thomsons Reuters
The deputy minister added that in order to prevent risks for the Iranian citizens, digital asset exchange in the country will be subject to a set of rules similar to those that apply to the stock market and other currencies. “Cryptocurrencies must be regulated and banking systems must be observed,” he added.
Source: News Bitcoin
Tehran authorities have in the past considered allowing Iranian businesses to use decentralized digital currencies for settlements with foreign partners as a way to circumvent Western financial sanctions. What they are focusing on at the moment, however, is the launch of the digital version of the nation’s fiat currency, the rial.
The Central Bank of Iran (CBI) has recently informed banks and other credit institutions about regulations related to the “crypto rial,” which has been under development for some time. They apply to the minting and distribution of the central bank digital currency (CBDC). The CBI will be its sole issuer and will determine the maximum supply.
According to Way2pay, the digital currency is based on a distributed ledger system that will be maintained by authorized financial institutions and capable of implementing smart contracts. The infrastructure and the guidelines for the CBDC have been finalized and it will be piloted in the near future, the publication unveiled.
Source: News Bitcoin
Iran’s Minister of Information and Communications Technology in February 2018 announced a plan for Iran to develop its own virtual currency, a move that had the backing of Iran’s cybersecurity authority provided that virtual currencies were properly regulated.17 Even the CBI’s Hakimi believes that the blockchain system and cryptocurrencies like bitcoin will eventually replace the current systems,18 a view shared by Masoud Khatouni, the deputy for information technology and communications network at Iran’s biggest bank, Bank Melli Iran (BMI), who has stated that cryptocurrencies are “currently shaping the future of banking” and should be recognized and widely accepted in the banking system and used by the banks themselves.
Source: tile.loc.gov
Cryptocurrencies are often used by black market operations to avoid reporting taxable or contraband transactions, as well as to launder money. However, blockchain transactions are traceable. Even if an alias is used, its operator is discoverable by institutions with the time, resources, and interest to do so, such as the Federal Bureau of Investigation and the National Security Agency. In fact, Iran consistently works to break up domestic money laundering and smuggling operations that use cryptocurrency. This is not to say that government-affiliated institutions or groups, themselves, wholly refrain from using cryptocurrency to evade sanctions. In fact, Iranian officials have called for the use of cryptocurrency specifically to evade sanctions. Nonetheless, through its own experiences, the Iranian government is acutely aware that such operations are traceable. It is quite possible that groups associated with the Iranian establishment, such as the Islamic Revolutionary Guard Corps (IRGC), are using these means for illicit purposes, at least, on a small scale. The disorderliness of institutional hierarchies, in addition to ignorance of the technology and occasional bravado, make enforcing policies and regulations difficult.
Source: Atlantic Council
The CBI’s action was in line with Iran’s recent efforts to address deficiencies in its policies on anti-money laundering and combating the financing of terrorism, with the aim of complying with the action plan of the Financial Action Task Force on Money-Laundering (FATF). The FATF, an intergovernmental organization established to combat international money laundering and terrorist financing, will determine at its plenary meeting in June 2018 whether to remove Iran from the FATF list of Non-Cooperative Countries or Territories.2 Previously, the CBI had only sought to warn people of the potential risks inherent in cyber currencies,3 although a directive passed by the Money and Credit Council, the most important policy decision-making organ of the CBI, “[had]
Source: tile.loc.gov
Iran to Launch Its Own CBDC ‘Crypto-Rial’
On Monday, the Central Bank of Iran (CBI) announced that it notified domestic banks and credit institutions about a series of regulations related to Iran’s ‘crypto-rial’, its forthcoming central bank digital currency (CBDC).
According to way2pay.ir, the rules describe how the digital currency is minted and distributed. Crypto-rials will be minted, and their maximum supply will be decided solely by the CBI.
Also, according to the website, a distributed ledger system, which comprises authorized financial institutions and can implement smart contracts, is supposed to be used to issue digital currency.
In earlier statements, the crypto-rial was to become the nation’s new currency, just like banknotes and coins, but it would be completely digital.
Source: Finance Magnates
The Central Bank of Iran’s executive board has approved a framework for the regulatory sandbox.
The sandbox will operate under the supervision of a strategic council in charge of setting regulations for the operation of the sandbox, the CBI website reported on Saturday.
Supporting innovative ideas, easing the process of offering financial services, and optimizing the process of regulating fintech startups will be the key features of the regulatory sandbox.
Source: Financial Tribune
