"The government is in favor of regulating cryptocurrencies. Businesses in this sector need to uphold transparently and pay tax. Digital currency miners will be given access to power at fair rates…The rules will be finalized by the Cabinet in four months," YJC quoted him as saying.
The government has a plan of action to regulate cryptocurrency mining and address deficiencies in the existing framework. It is reportedly rewriting rules announced by the former administration in which mining virtual currency was legal and miners operated under rules mandated by the government.
Those regulations do not allow use of cryptos for payment inside the country. However, banks and licensed moneychangers can use digital currency mined by authorized miners in Iran to pay for imports.
Private sector leaders have been provided with a draft of the new bill and told to share their views and experience with the Raisi administration.
Rezaei did not provide details about the new regulations; however, according to Way2pay website, the new framework would ban cryptomining and all related services, including importing, producing, selling and installing mining machines, except for those with a valid license from the Ministry of Industries, Mining and Trade.
The rapid growth and rising interest in mining and crypto trade prompted authorities in Tehran to craft a roadmap for this business. But it seems that that does not go far enough.
Experts say the issue is more complex than regulatory challenges. The result has been that no state body wants responsibility or involvement in the crypto industry per se.
The Central Bank of Iran said earlier this year that it was in no hurry to announce new procedures for crypto exchanges. It said it is formulating a plan for the crypto market in collaboration with state institutions.
Daily crypto transactions in Iran is estimated at 50 trillion rials ($181 million), significantly higher than capital market transactions.
A recent study by the Tehran Chamber of Commerce, Industries and Mining, showed 12 million Iranians have invested in digital currency.
Role of Energy Ministry
The previous government reinforced the role of the Energy Ministry in regulating the sector. Any license issued by the Industries Ministry must also be acceptable to the ministry.
The ministry is the authority that decides whether or not to sell electricity to applicants okayed by the Industries Ministry, taking into account the capacity of the national grid.
The ICT Guild Organization has censured the government for drafting rules that it says add to the hurdles the cryptocurrency industry is already facing and urged the Raisi administration to put the bill on the back burner.
"The bill is studded with restrictions. This is while the sector is indeed capable of increasing tax revenue and attracting investments in power generation," reads an open letter.
The bill was initially floated by the Energy Ministry under the former government, the letter claims, and is "in the interest of the electricity industry mafia." It was not clear who the mafia is and what connection it could have to the key power industry.
"The Energy Ministry wants expanded control and regulation of the cryptocurrency industry," it complained.