Iran: Majlis Enters the Crypto Fray

EghtesadOnline: The growing interest in investments in cryptocurrencies among Iranians has raised Majlis concerns with the speaker on Thursday calling on financial authorities to exercise caution in dealing with the controversial issues related to cryptocurrencies.

News ID: ۷۸۶۴۴۸

15 May 2021

"Imposing a ban on crypto trade in and of itself is not enough. The Central Bank of Iran is in charge of authorizing exchange shops. The CBI needs to develop precise regulations vis-à-vis the function of crypto exchanges and block their access to payment gateways until the rules finalized," Mohammad Baqer Qalibaf said in a letter, way2pay reported.

Parliament also instructed the Islamic Republic of Iran Broadcasting and the Ministry of Culture to take necessary measures to inform the people and spread public awareness about digital currencies.

In recent months Iranians in increasing numbers have been putting money in bitcoins and other coins as popular parallel markets, such as forex, gold and stocks lose appeal.

The CBI last week warned against trade in cryptocurrencies following the deep recession in parallel asset markets.

It strongly recommended the people to avoid trade in digital currency, warning again that such trade is prone to risks and that the CBI has no responsibility toward potential losses.

Trade in cryptocurrency is banned in Iran. However, recently the central bank said banks and licensed moneychangers can use the digital currency mined by authorized miners in Iran to pay for imports.

Earlier in March, in line with the government’s anti-money laundering measures the central bank ordered Shaparak, the local payment settlement network, to block online payment gateways owned by crypto exchange websites.

However, the increasing demand for cryptos is attractive and  profitable enough to keep crypto exchanges flourish despite the official restrictions.

2 Dozen Legal Farms

In 2019 the government recognized cryptomining as a legal industry. Miners had to apply for a permit from the Ministry of Industries. However, electricity was sold to the miners at rates much higher than the subsidized rates to regular subscribers.

So far 24 cryptomining centers and farms in Iran using 310 MW have permits.

The Majlis speaker’s letter also addressed the Iran National Tax Administration calling it to profile owners of crypto exchange shops and send a report to the parliament as soon as possible.

Lawmakers have also urged capital market authorities to create efficient investment vehicles for legal crypto trade.

Experts have warned policymakers about taking hasty measures regarding cryptocurrencies.

The Iran Fintech Association has said using digital currency has helped Iranian businesses bypass the US economic blockade, namely the tough restrictions on banking, industries, shipping and insurance. “Several businesses have either used the technology for meeting their needs or have invested in cryptocurrencies without any particular risk."

In mid-April, the head of the Majlis Economic Commission, Mohammadreza Pourebrahimi, said the legislature is developing a legal framework to allow crypto trade follwoing research to this effect. The commission was due to present the results of the study to the chamber last week.