Iran: Call for Crypto Use to Pay for Imports

EghtesadOnline: Cryptocurrency could be used to import electronic devices, says Shahab Javanmardi, a member of the Iran Chamber of Commerce Industries Mining and Agriculture, noting that a change in government approach is necessary for such deals.

News ID: ۷۵۱۷۶۳

01 January 2021

"Repatriating revenue from exporting gas and electricity is not possible under the present [US sanctions]. The government can promote use of excess electricity  output or power generated by small-scale plants to   mine cryptocurrencies and make up for the locked  resources," Eximnews quoted him as saying.

He proposed creating a central market, like the secondary forex market, through which cryptocurrency would be sold to local companies wanting to import machinery and goods.

Javanmardi, who is CEO of FANAP Company, a well-known provider of financial solutions, believes that the money raised from selling cryptocurrencies could be used for importing electronics.

"Iran imports $3 billion worth of electronic devices a year. A platform like Central Bank of Iran's Nima, could help meet the increasing demand for laptops, smart phones or other devices."

Nima is an online platform affiliated to the CBI where exporters sell their overseas income and local companies buy for importing goods, machinery, equipment and raw materials.

The Energy Ministry's concerns over possible power outages in summer and indirect subsidies pumped into crypto mining, prompted the government to increase electricity rates for cryptocurrency mining to 7 cents/one kilowatt-hour.

In July 2019 the government said it will recognize cryptocurrency mining as a legal industry. This was first welcomed by miners as a positive gesture, but many complained about the high power tariffs. Later some of them took their lucrative but illegal operations underground to deceive utility companies.

Miners are charged 4,800 rials for one kilowatt-hour that is half the electricity export rate in autumn, winter and spring. However, future billings are planned to be based on 19,300 rials/kw, twice the price for exported electricity in summer (June to Sept).

Bypassing Sanctions

Following the unilateral US withdrawal from the Iran nuclear deal and imposition of sanctions in 2018, experts soon proposed the CBI allow use of high-tech to evade Donald Trump’s inhuman economic siege.

Tehran has ratified regulations for legally mined cryptocurrency to be used to pay for imports. But the measure proposed by the CBI and Ministry of Energy, requires licensed cryptominers to sell the coins they mine directly to the CBI.

Average daily crypto transactions in Iran is estimated at $10 million to $40 million.  CBI officials deny rumors spread about high profits arising from cryptocurrency trade in Iran.