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October 2022, No. 101


Banking

Cryptocurrency in Official Trade


Experts believe that the use of cryptocurrencies for import is a positive action, because it will encourage economic activists to register miners licenses and they will be able to bypass economic sanctions to a large extent.


According to Ali Saleh Abadi, the Governor of the Central Bank of Iran digital currency has found its way into the official business in Iran. He also informed economic activists that they can mine and use cryptocurrencies for placing import orders. This is happening under conditions that buying, selling and investment in cryptocurrencies is still prohibited by the law, but its mining and use for importing goods is excluded from this law; Also, Crypto-Rial or digital Rial is also being implemented and according to the promises made by the government it is going to be available to people for daily use instead of banknotes. Experts believe that the use of cryptocurrencies for import is a positive action, because it will encourage economic activists to register miners licenses and they will be able to bypass economic sanctions to a large extent.

Digital currencies went through a tortuous path; it was the fall of 2019 that after several incidents that happened in the field of cryptocurrencies and blockchain from the underground, and then the government board announced a resolution based on which the cryptocurrencies were mined based on the licenses issued by this resolution. Only to provide the imported currency of the country and it can be exchanged based on the regulations set by the Central Bank, it was also decided that the miners will supply the produced first-hand cryptocurrency up to the allowed limit and directly (without intermediaries) to the channels introduced by the Central Bank.

On the other hand, it was announced that the authorized limit of cryptocurrency mined and exchangeable by each extracting unit based on the amount of energy consumed by that unit will be determined based on the instructions compiled by the Ministry of Energy and will be periodically reported to the Central Bank. From this bylaw, the Central Bank, in cooperation with the Ministry of industry, mine and trade, formed a joint currency working group in the winter of last year to finalize the issues related to the mechanism of using cryptocurrencies in foreign trade and to approve the preparations for implementation.

Now the news of the first registration of official import orders with currency code is heard, which can be a highway to bypass the sanctions and facilitate trade with the world, because with the intensification of economic sanctions, the path of traders for economic activities is narrower and the mechanism of financial transfers and bank exchanges with restrictions have been encountered, which are considered to be one of the main obstacles to the development of foreign trade, which was based on the fact that in order to overcome these sanctions, the foreign trade trustees, with the interaction of the Central Bank, targeted the use of cryptocurrencies in the foreign trade cycle.

The head of the Trade Development Organization also announced a few days before the start of placing import orders using cryptocurrencies and said: This week, the first official import order registration with cryptocurrencies of 10 million dollars was successfully completed. Also, according to Alireza Peyman Paak, until the end of September, the use of cryptocurrencies and smart contracts will become widespread in foreign trade to the target countries. 

Saleh Abadis warning

The Governor of the Central Bank said in this regard: Some countries have not yet recognized cryptocurrencies, and in some countries, such as China, transaction and investment on cryptocurrencies, but mining and using them to import goods is authorized. Of course, we have prepared regulations so that cryptocurrencies can be exploited for importation with the coordination of the Ministry of Industry. The Governor of the Central Bank added: The fluctuations of the cryptocurrency market are also high and it should be taken into account. Also, the Rial code or the digital Rial replaces the Rial banknote, and its work has been completed; the Digital Rial will be running on a trial basis in September, as promised, and the publisher of the Digital Rial is the Central Bank and people can use it instead of banknotes. 

Encouraging legalization of cryptocurrencies

In this regard, Albert Baghzian, an economic activist said: The new law for cryptocurrencies is apparently a little contradictory, that it cannot be bought and sold, but its extraction is not a problem for import, to some extent, it poses a problem for economic activists, because first of all, they have to prove how much cryptocurrency they have mined and secondly stay out of the currency market.

The economic expert added: The Central Bank has urged economic operators to register and obtain licenses so that it can be determined how much cryptocurrency has been mined and they can use it to import goods, while if it is only an activity based on purchase and sale and transaction, it is not clear who should buy or sell currency, but with this mechanism, since the license for mining activity is issued, accordingly, the license for buying and selling is also issued.

He stated: Economic activists who are mining can also sell cryptocurrency, but in order to encourage legal registration of their activity, in addition to mining permission, they also have a license to import goods in order to prevent their illegal activities, because it was seen a lot in chicken farms or Gawdari is extracting miners, with this law, those who have the license to mine cryptocurrency can have official activities and import without transferring currency, and they can also buy goods with cryptocurrency or convert it to dollars.  

What people are included?

Regarding who is subject to mining, the Governor of the Central Bank said: Registration of orders using cryptocurrencies was an issue that was agreed between the Central Bank and the Ministry of Industry late last calendar year. Based on the memorandum the owner of the cryptocurrency who has performed the mining based on a legal license can use the cryptocurrencies for import.  People can legally obtain a license and perform cryptocurrency mining, on the basis of which people who had a license according to the law and performed mining can submit their mined cryptocurrency for import.

Saleh Abadi added: The mechanism of how to implement this process has been agreed between the Central Bank and the Ministry of Silence and has now reached the implementation stage. Considering that the mechanism of this process has been determined and has reached the implementation stage, information about this issue is not going to be published in the media and in fact it will remain confidential for the time being. But this news was published for the awareness of traders and applicants for cryptocurrency imports so that people know how to proceed.

 

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