The Iranian government has made it compulsory for bitcoin (BTC) miners in the country to sell their coins to the state, so authorities can use the digital currency to pay for imports amidst crippling international sanctions.
Iran Hoping on Bitcoin
While Iran is one of the world’s richest countries when it comes to crude oil and natural gas production, the economy of the Islamic State has been nearly crippled by international sanctions as well as the COVID-19 pandemic which crashed its daily oil production from 3.1 million barrels to a mere 1.9 million.
In a bid to alleviate its economic hardship and generate funds for the payment of imports, the Ministry of Energy and the Central Bank of Iran has put in place a legislation that makes it mandatory for registered bitcoin miners in the region to sell their coins to the state.
It will be recalled that the government of Iran officially legalized cryptocurrency mining operations in August 2019 and made it mandatory for miners to secure the necessary license from the Ministry of Industry, Mine and Trade.
Per sources close to the latest development, Iran, which recently switched its primary reserve currency from the U.S. dollar to the Chinese yuan, since it can no longer access its USD reserves, has watched its foreign reserves crash by more than 33 percent in the last 24 months and it’s now looking for ways to turn its dwindling fortunes around.
While bitcoin (BTC) and other cryptocurrencies are entirely different from global fiat currencies, the Iranian government is hoping that the borderless nature of the former will make it easier for it to pay its international trade partners.
Though the government is yet to release more details concerning the move, the CBI has however hinted that the miners will be required to send the cryptos directly to specific channels that will be provided to them.
With the price of bitcoin (BTC) now aiming for the moon once again, it remains to be seen whether the Iranian government will be able to purchase the coins from miners at a reasonable rate that will make the deal a win-win scenario for all parties.
Iran’s stance on crypto remains unclear, as the government’s regulations concerning the burgeoning digital asset class cannot be described as completely amenable, however, the new alliance could potentially turn things around, especially if the nation successfully cushions the adverse effects of its international sanction via bitcoin.