Iran may be attempting one of the first instances of digital currency protectionism, in a broader effort to circumvent the effects of sanctions
Digital currencies traded in the country must have been mined, or “extracted” there as well, barring the exchange of digital assets mined abroad, as announced by the Central Bank of Iran on Wednesday and which was seen through tweets from news outlet Iran International.
Blockchain lawyer and advisor Fatemeh Fannizadeh noted that the ban may be aimed primarily at banks and forex entities using crypto to pay for imports, though many observers have pointed out that enforcement would be nearly impossible
Regulations that will allow banks and other financial institutions use crypto to pay for imports, was ratified by the Central bank of Iran in late April and which under that framework, institutions can use crypto from state-licensed mining operations for purchases. Aimed at ensuring that only crypto mined from approved farms will be used for imports, is the purport of the new regulation.
A thousand licenses for crypto mining facilities, including a Turkish-run 6,000-rig farm have been issued since 2019 by regulators.
The new laws may be part of a larger sanctions strategy years in the making. Iranian research institute Majlis Research Center has been calling on the country to use cryptocurrency to circumvent crippling economic sanctions as far back as 2018, where they wrote in one report that digital assets could be leveraged for international trade:
“According to experts, one way to avoid the adverse effects of the unjust sanctions is to use cryptocurrencies for foreign trade.”