Business And Markets

Majlis Sees the Bright Side of Digital Currency

Majlis Sees the Bright Side of Digital Currency
Majlis Sees the Bright Side of Digital Currency

A recent study by the Majlis Economic Commission has recommended a new approach to the cryptocurrency industry to be able to use it in improving the economy.  
The results the research, presented to the chamber in Tuesday's open session, say cryptomining has the potential to help solve financial hurdles faced by the energy sector, the parliamentary news agency reported.
“The Energy Ministry’s delays in meeting its financial commitments to investors has caused problems for the private sector," reads the report on "Lifting current restrictions can help promote the power industry".
Cryptominers should link up with private power plant owners, the study said, noting that transparency should be up front in dealings between the digital currency miners and power plants.
The government should strive to enhance private sector investment in the power production so that it “can meet the demand of households and industries including cryptominers.”
The study calls on the government to let the miners purchase power through the Iran Energy Exchange, or directly from local and foreign producers.
It also proposes barter deals for the cryptomining industry using subsidized power through which the digital currency would be paid to the government in return for the resources used "at a reasonable rate set by the CBI".
Authorized cryptominers should be allowed to set up their own renewable energy farms, to rare study said.


Mining virtual currency is legal in Iran and miners are allowed to operate under rules approved by the government. However, trade in crypto is banned even though later the central bank said banks and licensed moneychangers can use the digital currency mined by authorized miners in Iran to pay for imports.
The growing interest of Iranians in mining and trading cryptocurrencies has prompted authorities to craft a roadmap for crypto business as a whole. However, the issue, experts say, is more complex than previous regulatory challenges. The result has been that no state body wants responsibility or get involved if things don’t proceed as desired, which is likely.
In the roadmap the government should be in charge of regulating the cryptocurrency market. If endorsed by the Majlis, law would require the government to set rules for cryptos within three months.
"Cryptocurrencies are gaining traction in Iran. This is while, none of the domestic crypto trading platforms are authorized, nor expected to be authorized in future," reads the report, adding that lack of clear-cut regulations has led to considerable losses for investors.
The ban on trade in cryptocurrencies is suggested to remain in place, except for “national cryptocurrencies”.
"Growth in the popularity of cryptocurrencies as a tool for settlement could devalue the rial. Dominance of digital currency as a means of payment would create major hurdles for the economy, in particular becsue of the decentralized nature of cryptocurrencies."
The Majlis news agency did not elaborate on national cryptocurrency. It was possibly referring to the CBI's plan for the issuance of the ‘crypto-rial’ as a central bank digital currency (CBDC) and as digital money.
CBI officials have said that the planned 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.
The study urged capital market authorities to create efficient investment vehicles for legal crypto trade.
This is while, earlier this month Iran's Securities and Exchange Organization said it has no plan for hosting cryptocurrency trade in the capital market.
SEO officials, however, have concurred that they would look at the issue if the CBI regulates cryptocurrencies.


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