Iran’s Ministry of Industry, Mines and Trade has legalized the use of cryptocurrencies for imports, allowing Iranian businesses to use crypto for imports. This is despite persistent international trade restrictions.
According to local media, commerce minister Reza Fatemi Amin stated that precise legislation outlining the use of cryptocurrencies in commerce and the provision of fuel and electricity to Bitcoin (BTC) and cryptocurrency miners in the country had been approved.
Amin announced the regulatory change on August 28 at an auto industry convention, just one week after the country’s first-ever $10 million import order for vehicles paid for with cryptocurrency. The Iranian commerce ministry has previously predicted that cryptocurrency and smart contracts will be widely used in international trade by September 2022. Now, Iranian businesses can use cryptocurrency for imports, allowing them to circumvent international sanctions imposed by the international community.
Following the shipment financed by cryptocurrencies, Iran’s Import Association advocated for clear regulatory restrictions to prevent local businesses and importers from being hampered by inconsistent instructions.
The minister stated that the new legislation encompasses all facets of virtual currencies, including the licensing process and the availability of fuel and electricity to mining businesses.
Automobiles and a variety of other imported items are anticipated to be able to be imported into Iran by local companies using cryptocurrency rather than U.S. dollars or euros.
Iran has been effectively cut off from the global banking system as a result of the opposition to its nuclear program, which has led to the imposition of international trade sanctions.
Given the decentralized nature of public blockchains such as Bitcoin and Ethereum, which are not controlled by the government or central agencies, Iran has recently shifted its focus to adopting cryptocurrencies as a means of addressing and possibly circumventing import restrictions.
In June 2021, the Iranian Ministry of Mines, Industry, and Trade issued operational licenses to thirty crypto mining facilities and granted approval to over 2,500 applications for additional mining operations. In the months that followed, in an effort to alleviate pressure on the national grid, the government also cracked down on illegal mining and issued a three-month mining ban.
The Iranian Downside Of Cryptography
While cryptocurrency and its underlying technology have many advantages and have disrupted global financial markets to some extent, crypto has yet to reach its full potential. The powers-that-be, however, frequently employ this extremely difficult to trade traditional currency alternative for nefarious purposes.
It is generally accepted that North Korea’s regime uses government-sponsored hacker groups to fund its iron-fisted and tyrannical rule over the communist enclave’s ordinary citizens.
In the short term, Iran’s prowess in the crypto sphere and the legalization of its use for imports to circumvent international restrictions have the potential to render international sanctions meaningless. Governments across the globe are aware of this characteristic of cryptocurrencies, and we will undoubtedly witness a crackdown on decentralized finance and the implementation of CBDCs, which may eventually replace the current crypto-economic model.