Lawmakers reportedly have a plan for disciplining the cryptocurrency market, one of the articles of which requires licensed miners to regularly report the Central Bank of Iran regarding their output.
According to Tasnim news agency, the plan seeks to extend legislative support to the legal cryptominers and at the same time regulate crypto trade. Parts of the plan, mostly those related to legal mining, are similar to regulations already passed by the government. The new articles call for expanding oversight of the miners' operations.
The plan calls on the High Council of Anti-Money Laundering and Counter Terrorism Financing to develop a mechanism to check miner's compliance with AML/FCT regulations.
It recognizes the CBI as the top regulatory body of cryptocurrency market requiring the central bank to announce new crypto trade rules in three months. The plan, however, clearly bans use of cryptocurrency as a medium for payment, except for the "national cryptocurrency" which would be usable without restrictions.
The news agency did not elaborate on the "national cryptocurrency". It could mean CBI's plan for the issuance of the ‘crypto-rial’ as a central bank digital currency (CBDC) and a digital form of money.
CBI officials have said that the crypto-rial is a digital form of money to be circulated by the central bank and not a cryptocurrency that could be used for small cashless transactions.
In another section of the plan, the Ministry of industries, Mining, and Trade is seen as the body in charge of regulating cryptocurrency mining. The ministry is required to create the conditions for cryptomining growth and has set a target of $500 million in gross income for the sector by March 2023.
Mining virtual currency is legal in Iran and miners are allowed to operate under rules approved by the government in July 2019. However, trade in crypto is banned even though recently the central bank said banks and licensed moneychangers can use the digital currency mined by authorized miners in Iran to pay for imports.
It also considers legal cryptominers eligible for taking out loans from the National Development Fund of Iran and allows them and power plants to conduct barter deals via the Iran Energy Exchange.
In April the Energy Ministry revised cryptomining rules as per which 16,574 rials is charged for one kilowatt-hour of electricity. Rates double during restrictions like when power plants do not receive enough gas as feedstock or the national grid faces problems supplying households.
In 2019 the ministry called authorized crypto miners to set up their own renewable energy farm, allowing miners to use the national grid as backup when renewable output was insufficient.
Role and Responsibility
The rising interest of Iranians in mining and trading cryptocurrencies has prompted authorities to craft a roadmap for crypto business as a whole. However, the issue of cryptocurrencies, experts say, is more complicated than previous regulatory challenges. As a result, no state body wants responsibility or get involved if problems arise, which is likely.
Earlier this month, the CBI announced that it is in no hurry to announce new procedures for cryptocurrency exchanges. It said it is preparing a roadmap for managing the crypto market in collaboration with state institutions, including the High Council of Cyberspace.
The council, however, says the central bank should develop regulations for cryptocurrency exchanges without publicizing anachronistic concerns about the interest of investors and pattern of fluctuations in the value of digital assets.
Media outlets last week published a letter from Mahmoud Vaezi, President Hassan Rouhani’s chief of staff, in which the CBI was asked to stop blocking cryptocurrency exchanges.
