BitcoinPolitics

Iran Amends Law to Fund Imports with Bitcoin

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Iranian media outlet Iran Daily reports that the Iranian cabinet has amended regulations to allow Bitcoin and other cryptocurrencies to be used to fund imports. 

Citing IRNA, Iran Daily notes that this new legislation will allow the central bank of Iran to acquire digital assets directly from miners within the country. This purportedly was a joint effort by the central bank and Iranian Ministry of Energy, the latter of which has been strongly regulating Bitcoin mining over recent months.

The new regulation entails that bitcoin mined in the country can only be sold for fiat currency when they are used to finance imports. 

“The miners are supposed to supply the original cryptocurrency directly and within the authorized limit to the channels introduced by the CBI,” the report purportedly reads.

Earlier this year, the Iranian government told all cryptocurrency miners to disclose information about themselves, their mining farms, and their equipment with government branches. Those that do not disclose their operations are subject to fines. 

This means that if miners use their mined cryptocurrencies for any other purpose than to be sold to the country's central bank, there may be consequences. 

Estimates by the Cambridge Centre for Alternative Finance indicate that Iran currently controls 3.82% of Bitcoin's total hashing power. This makes it the sixth-largest country for mining. Assuming the numbers are correct, it would mean that Iranian miners collect around 34 bitcoin each day. This equates to $450,000 at the current price. 

The Beginnings of Central Bank Bitcoin Accumulation

While it isn't clear how far the central bank of Iran's Bitcoin and cryptocurrency holdings go, analysts in the space expect central banks to eventually adopt Bitcoin as a reserve asset. 

Cryptocurrency analyst Qiao Wang stated that he wouldn't be surprised to see a nation-state announce an allocation to Bitcoin in the foreseeable future:

With the rate at which corporations are adopting BTC, I wouldn’t be surprised if a nation-state announces their investment in BTC within the next 5 years. The biggest BTC bulls may find this completely realistic, but for people who used to hang out on bitcointalk 9 years ago this would be an absolutely incredible achievement.

Max Keiser, founder of Bitcoin venture fund Heisenberg Capital and host of the Keiser Report, said in August that central banks can only "save" themselves by buying bitcoin: 

At the very least, corporations and institutions have begun acquiring bitcoin en-masse. 

Stone Ridge Asset Management just disclosed that it owns 10,000 bitcoin, currently valued at $113 million. A week prior to this announcement, financial technology giant Square purchased $50 million worth of bitcoin to help hedge its balance sheet, inspired by a $425 million move from MicroStrategy. 

Digital asset manager Grayscale Investments also recently revealed that over Q3 of 2020 alone, it secured $720 million worth of investment for its Bitcoin Trust, mostly from institutional investors.

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Nick is a writer and analyst who has been following Bitcoin since 2013. When he is not writing, he works on HTC's Bitcoin phone, EXODUS.