The crypto wave is moving globally. The latest in the cryptocurrency world is the Iran’s new crypto law. The Iranian government has amended its crypto regulations to allow mainstream cryptocurrency use. It enables its central banks to import goods using mined BTC.
According to the government-controlled media house IRNA news agency, the new laws need licensed miners to sell their coins to Iran’s central bank. The new law is a work of the Central bank and the ministry of Energy.
The new law means that the miners would not trade their cryptos as before. Instead, they would need to supply the CBI with the given limit.
The instructions on the supply will come from the ministry. It depends on the subsidized energy the miner uses. The ministry will provide a ceiling that no miner should exceed that. Every other exchange would also be in line with the new crypto law.
It also guides crypto circulation in the local financial system. It is the best short for Iran at international trade. This follows its weak economy.
Iran has had one of the worst economic performance recently. The country struggles to contain high inflation rates. At 35% since 2018, inflation means the national fiat money is losing its value. They are thus struggling to pay for imports and other international trade.
The country is also reeling from the effects of economic sanctions. The US sanctions mean it cannot use the USD as a back-up currency. They have since been struggling to purchase essentials such as pharmaceuticals and other supplies.
Iran’s choices have become less with growing struggles. While Bitcoin struggles with volatility, it has no choice but to adopt it. The desperate economic situation means only virtual currencies can come in place.
The new crypto law is the first time a country adopts cryptocurrencies in a centralized system. Most of the countries have only planned to regulate the coins without direct adoption. Some of them have also banned them.
The move by Iran can be the start of a new trend for the cryptos. No country ever wants to be the first to make such a move.
The Possible Effects of Iran’s New Crypto Law
Iran’s new law is not the most popular move in the crypto world yet. Satoshi Nakamoto launched Bitcoin to ensure decentralization. The miners believe the coin is the liberation from the government-controlled economy.
By regulating cryptos, the currencies become more centralized.
The other concern is on the trading rates by the ICB. BTC rates rely on market trends. There is no single entity that determines supply and value. The new laws give the bank power to determine rates. The traders will most likely be on the losing end as they lose the profit margins.
The rule to control BTC is not in other industries. Crypto mining in the country would become more unattractive. More miners would plan to operate anonymously. This loses the country’s revenue in the process.
Also, as mentioned before, other countries are likely to join Iran in crypto adoption. After Iran, other countries would be willing to use cryptos in the mainstream economy, albeit with various rules.
Iran’s new crypto rules are the start of a new digital currency evolution. It makes a new way through which countries can use digital currencies.
Most traditional currencies are struggling following the pandemic. Cryptocurrency adoption is the way. Soon enough, newer crypto laws would be in place.