Iran’s Recognition of Crypto Mining Prompts Local Bitcoin Price Spike

Sep 6, 2018 at 12:30 UTC
Updated Sep 6, 2018 at 14:50 UTC
NEWS

The Iranian government has recognized cryptocurrency mining as a lawful activity as part of its effort to introduce a national cryptocurrency – a move that saw bitcoin’s price briefly spike to record levels on local exchanges.

According to news agency IBENA, which is affiliated to the Central Bank of Iran, Abolhassan Firouzabadi, the Secretary of Iran’s Supreme Council of Cyberspace stated on Tuesday that cryptocurrency mining “has been accepted as an industry in the government.”

Further, the official said the decision was arrived at after consensus among other relevant government agencies such as the Ministry of Communications and Information Technology, the Central Bank and the Ministry of Economic Affairs and Finance, although a final policy legislating for the activity hasn’t been declared as yet.

The move to recognize cryptocurrency mining comes as the country is taking efforts to create its own central bank digital currency as a means to bypass the U.S. economic sanctions recently reimposed by President Trump, as previously reported by CoinDesk.

Firouzabadi added that a national cryptocurrency remains a “promising” tool to facilitate financial transactions with Iran’s trade partners, as the Trump administration has restricted the country’s access to U.S. dollars.

With regard to cryptocurrency trading activities, the official further said “a decision-making authority will declare the framework and final policies for trade and participation of startups and trade activists in the cryptocurrency sphere by September but no definitive decision has been taken yet.”

CoinDesk also reported in July that cryptocurrency investors in Iran then appeared to be facing restrictions from the state, with users being blocked from accessing accounts at exchanges such as Binance, even if using virtual private networks or VPNs.

Following the country’s recognition of crypto mining, reports indicate that the price of bitcoin on some local exchanges such as Exir peaked to over $24,000 – exceeding the global average all-time high of $20,000 seen in December – while prices elsewhere yesterday were around $7,000.

Data from CryptoCompare backs up the reports, indicating that OTC trading prices on LocalBitcoins briefly reached as high as $25,000.

Editor’s note: Since publication, some commentators have offered an alternative take, suggesting that the bitcoin price spike was due to a wild fluctuation in the value of the rial, Iran’s national currency.

Azadi Tower, Tehran, image via Shutterstock