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Iran’s central bank is reportedly allowing some of the country’s financial institutions to use cryptocurrency to pay for imports. However, the cryptocurrency has to be derived from licensed miners.
In an article in the Financial Tribune that appeared on Saturday, the Central Bank of Iran (CBI) has notified money changers and banks of its amended regulatory framework for crypto payments.
It will now be possible for institutions such as banks and forex shops to circumvent U.S. economic sanctions and pay for goods and services from other countries. It is calculated that local Iranian crypto mining industry could generate as much as $2 million daily revenue.
As the Financial Tribune reports, the Iranian government ratified regulations that would enable crypto to be used legally for imports in October 2020, with the restriction that miners sell their coins directly to the CBI. Now with the amendment in place, the coins can leave the country directly thru trade.
The new ‘strategy’ may have been in preparation for a few years now. The idea to bypass sanctions was previously suggested in a 2018 report from Iranian the Majlis Research Center that read:
“According to experts, one way to avoid the adverse effects of the unjust sanctions is to use cryptocurrencies for foreign trade.”
Shahab Javanmardi, a member of the Iran Chamber of Commerce Industries Mining and Agriculture, pushed for the government to use cryptocurrency back in January of this year. This to help counter trade difficulties in a geopolitical climate not beneficial to Iran. Javanmardi is clearly inspired by the example of Venezuela, another country that was hit by U.S. sanctions. The country reportedly used Bitcoin for their trade with Turkey and Iran. Javanmardi had said:
“Repatriating revenue from exporting gas and electricity is not possible under the present [U.S. 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.”
It was Javanmardi proposal of a central market that presumably led to the amendment. A market similar to the secondary forex market, through which officially mined cryptocurrency could be sold to Iranian firms seeking to import materials, machinery and other goods.
Iran’s crypto mining industry has had some turbulent years. Despite the government being a proponent of the industry, it does want to be in control. This has lead to mining operations being closed en masse in the past and some sudden power outages.