- Iran became the first country in the world to officially accept Bitcoin as international medium of exchange.
- The country was pushed towards the move due to the new wave of sanctions that arrived earlier this week.
- Now, the country plans to only use legally mined BTC, meaning that miners need to sell their coin to the CBI.
According to a recent report citing the Islamic Republic News Agency (IRNA), Iran has just become the first country to use Bitcoin (BTC) as a legal means of exchange. The country made this move due to the most recent wave of sanctions by the US’ Treasury Department.
The Treasury Department pushed a new wave of sanctions against the country only days ago, and Iran has already reacted. The country now hopes to use Bitcoin for international settlements, according to yesterday’s reports.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
Iran’s government moved quickly to amend its cryptocurrency regulations in order to allow crypto miners to redirect their coins to the country’s finance mechanism for international trades.
While the sanctions are undoubtedly the biggest factor in the decision to shift to Bitcoin, Iran also made the move due to the fact that its fiat currency suffered a lot as a result of the COVID-19 pandemic.
Iran has strict rules regarding which coins can be used
While a shift to Bitcoin is a major move for the crypto industry, Iran’s new legislation stresses that only those BTC coins that were mined legally can be used for financing imports from abroad.
In other words, anyone who mines BTC in the country is under obligation to sell the coins to the Central Bank of Iran (CBI). The report also notes that there is an authorized limit under which the new coins need to arrive.
Each miner will have a legal cap, based on how much electricity they have to consume to conduct their mining operations.
Iran did not always appreciate cryptocurrencies and their potential. Many may remember that the country only made Bitcoin trading legal in August last year. However, since then, the country became much more open-minded regarding digital currencies.
The government started providing the miners with energy in order to encourage mining BTC legally. It issued over 1,000 licenses for mining gear in January 2020, and only a month ago, it offered as many as three power plants to the country’s miners.