Iran Now Accepts Cryptocurrency Mining As A Legitimate Industry, Local Sources Report

  • Iran's government has reportedly accepted cryptocurrency mining as a legitimate industry.
  • This news comes shortly after Iran revealed that it has completed the development of its national cryptocurrency.
  • Presumably, only government-approved organizations may conduct cryptocurrency mining in Iran since the nation has not yet clarified its stance regarding cryptocurrencies.

IBENA, an Iranian news agency focusing on banking and local economic developments, recently revealed that cryptocurrency mining has been approved as an industry in Iran.

Over the last few months there have also been reports of Iran working on developing a state-backed digital currency.

Clarified Stance On Cryptos Expected By End Of September

According to Abolhassan Firouzabadi, the Secretary of Iran’s Supreme Council of Cyberspace, the National Cyberspace Center has been working closely with the nation’s central bank on managing crypto-related activity in the country.

The Iranian government’s announcement noted that the nation’s central financial institution will serve as a “trustee in [the] foreign exchange area” and as a “decision-making authority” in outlining the framework and policies for the “trade and participation of [local cryptocurrency] startups.”

Iran’s central bank is expected to announce its “definitive” stance on cryptocurrencies toward the end of the month. Firouzabadi also confirmed that the country’s national cryptocurrency will be used as “a financial transaction instrument with Iran’s trade partners”, in order to bypass US-led economic sanctions on the so-called rogue state.

Crypto Mining Officially Approved As Industry

Moreover, IBENA provided important details regarding the acceptance of crypto mining as a legitimate industry in Iran. The local news agency, which is reportedly affiliated with the central bank of Iran, wrote,

“[cryptocurrency] 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 it, but the final policy for legislating it hasn't been declared yet.”

IBENA (Iranian news outlet)

Presumably, only government-approved agencies and organizations might be authorized to engage in mining digital currencies, considering that local citizens are still prohibited from engaging in crypto-related activity. However, there have still been reports of Iranian residents who are trading and investing in cryptocurrencies.

In most countries that have banned or restricted cryptocurrency trading such as India and China, local crypto traders have found ways to buy and sell cryptos mainly by using peer-to-peer (P2P) or over-the-counter (OTC) trading options.

Bitcoin’s Network Slows, Causing Spike in Unconfirmed Transactions and Fees

Michael LaVere

Bitcoin’s network has slowed down following the block reward halving, leading to a buildup in the mempool. 

Bitcoin’s mempool has reached its largest size in two years as mining activity on the network has decreased following the block reward halving.

The mempool represents all of the unconfirmed transactions that have been initiated on Bitcoin’s network but have yet to be included in a block.

The spiking mempool and glut of unconfirmed transactions is the result of reduced mining activity on bitcoin’s blockchain following May 11’s halving.

Transactions waiting in the pool are given preference by miners based upon their transaction fee, causing low-fee sends to be caught in the digital equivalent of limbo. 

Due to the high level of competition for block space, the network’s transaction fees have been on the rise. 

According to data from BitInfoCharts, the average network fee for Bitcoin has reached a 2020 high of $6.64, up from $1.92 prior to the halving.

Users are being forced to pay a premium in order to ensure their transaction is given preference over the backlog of the mempool. 

In addition to rising fees, the dropoff in network activity has led to blocks taking longer to be mined. According to BitInfoCharts, block times have reached as high as 14 minutes post-halving, up from its historic average of 10 minutes. 

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