Bitcoin News: The Iranian parliament has drafted new legislation to centralize and regulate the use of cryptocurrency. The country has also proposed licenses to be issued to Bitcoin miners. Iran plans to issue a national cryptocurrency for settlement of domestic transactions and ban the use of cryptocurrencies issued outside of Iran. Licensing Bitcoin mining operations can overcome permanent power outages caused by illegal mining operations that consume excessive electricity.
After a crackdown on Bitcoin miners, the Iranian government is now taking steps to license these operations. So the general ban on cryptocurrency mining could be lifted soon.
Central Bank of Iran tries to prevent capital flight
Iran’s economy is in crisis after collapsed oil exports, systemic corruption and decades of mismanagement. The economic turmoil has affected the national currency, the rial, which has fallen sharply against the dollar since former US President Donald Trump’s withdrawal from the nuclear deal in 2018.
Since then, the Central Bank of Iran (CBI) has been tied to foreign currencies and has sought to counter capital flight by enforcing a general ban on the use of cryptocurrency issued outside of Iran.
The ban served as an opportunity for Iran to expand its power plant infrastructure and make repairs to existing power grids to try to mitigate the impact of the crypto flow. Many unlicensed mining companies operate across the country, as electricity costs about US$0.003/kWh, or about forty times less than the world average of US$0.14/kWh.
President Hassan Rouhani said:
In order to legalize the activities of cryptocurrencies in this area and protect people’s capital, we must think of a solution as soon as possible and put forward and communicate the necessary laws and instructions.
Interestingly, the proposed bill also proposes that Iranian cryptocurrency miners would be allowed to build and operate new power plants by obtaining special permits from the Ministry of Energy. These companies can then sell the excess energy they produce at their stations to the ministry.
With the new regulations across the country, Bitcoin mining activities in terms of profit are expected to rise in terms of costs, including electricity. Still, the Iranian authorities offer miners the opportunity to make more profit by selling the excess electricity.