Lawmakers in Iran want to regulate crypto exchange in the country within the existing legal framework. According to a local media report, a new bill has been tabled in the Iranian parliament to regulate crypto exchanges under existing foreign exchange and currency smuggling laws.
If the new law passes, it would make it mandatory for crypto exchanges to acquire a license from the central bank. Their activities would be regulated under the same laws that regulate the foreign exchange market within the country. However, it is not clear how Iran expects crypto exchanges to operate under the same laws that govern the traditional financial sector.
Clamping Down on the Growing Crypto Sector
It is an indication that Iran intends to clamp down on the growing digital currency space. If a crypto business violates the proposed laws, it would face huge penalties with a possible stint in an Iranian jail. Most crypto exchanges in Iran have registered abroad. Thus, it is not clear how the Iranian government would enforce the laws on foreign-based businesses.
Crypto has become quite popular in Iran. As the access to the global financial system is limited, many Iranians have turned to crypto as a way to participate in the financial system. Besides that, they see crypto as a haven as their national currency is currently facing runaway inflation.
Growing Popularity of Crypto Mining
Iran has some of the cheapest electricity rates in the world. As a result, crypto mining, which is heavily reliant on electricity, has been growing in popularity in the nation. The nation, which initially had reservations regarding the sector, has since warned up to it.
Iran currently recognizes crypto mining as a legal business. All mining firms have to acquire a license to mine crypto. Besides that, they pay slightly more for power than ordinary Iranians. Since Iran began issuing crypto mining licenses, over 1000 crypto mining firms have received the licenses. The latest crypto-mining license was issued to a Bitcoin mining firm, which has over 6000 mining rigs.