Over the past few months, Iran has reportedly been working on developing a state-backed digital currency and a recent revelation by local media from the country seem to point towards the possibility of this becoming a reality sooner than later. According to IBENA, the country’s Supreme Council of Cyberspace has declared that mining of digital currencies will now be officially recognized as an industry.
The Supreme Council of Cyberspace’s secretary, Abolhassan Firouzabadi, stated that the full terms of regulation and policy for cryptocurrencies and mining will be declared by the end of the month. Regardless of the fact that the policies and regulations are yet to be confirmed, the Iranian government has long considered digital assets and associated mining activities to be legitimate and recognized industries.
Apparently, the country’s plans to regulate the industry are heavily influenced by its economic sector, that is, its banking and financial institutions that have supported the industry all along.
“Secretary of Iran’s Supreme Council of Cyberspace stressed that cryptocurrencies mining like bitcoin has been accepted as an industry in the government and all related organizations to the mining such as Ministry of Communications and Information Technology, Central Bank, Ministry of Industry, Mining and Trade, Ministry of Energy, as well as Ministry of Economic Affairs and Finance have agreed to it, but the final policy for legislating it hasn’t been declared yet,” reads the IBENA report.
The announcement also noted that the country’s central financial institution will serve as “trustee in the foreign exchange area” and as a “decision-making authority” in outlining the yet-to-be-released framework and policies that will govern trade and participation of the local cryptocurrency startup companies.
Deflating The Effects of Economic Sanctions
The central bank is expected to deliver a statement regarding its definitive stance on digital currencies by the end of September. The state-backed cryptocurrency which will presumably be regulated by the central bank, if launched, will serve as “a financial transaction instrument with Iran’s trade partners” which should enable the so-called rogue state to go around the US-led economic sanctions that it has been subject to.
Iran is not the only country that has considered digital currencies as a means of deflating the effects of economic sanctions. Similar moves have been made by countries like Venezuela, which issued a digital currency back in February. Referred to “petro”, the Venezuelan cryptocurrency was reportedly backed by oil. Unfortunately, petro ran into trouble a couple of months back with reports revealing that the digital currency has found no takers. Also, the oil that was supposedly meant to back it is just not there. Hopefully, the same misfortunes went fall upon Iran’s planned digital currency future but, then again, it might be too early to tell.