An Iranian central banker warned on Monday that trading in bitcoin and other cryptocurrencies is illegal in the country.
Nasser Hakimi, deputy governor for new technologies at the Central Bank of Iran, told local news agency Tasnim that the Supreme Council on Countering Money Laundering and Financing of Terrorism Crimes had prohibited the sale and purchase of cryptocurrencies.
Cautioning Iranians against advertisements and marketing of pyramid-style network schemes, Hakimi said such scams “promote Bitcoin like a tree with gold coins in the Adventures of Pinocchio”.
Crypto-Mining Not Illegal
While warning about the legal risks of buying and selling digital currencies, Hakimi drew a distinction between trading and mining crypto-assets. While the production of Bitcoins and other cryptocurrencies is not illegal in Iran, some of the mining operations that exploit cheap electricity in the country are.
Iran subsidises household electricy bills and some commercial users, but cryptocurrency miners have also been claiming the discount. The government has now said it would cut off power to all the mining operations it could identify until new energy prices are approved.
Bitcoin farms have reportedly been springing up in old factories and warehouses, even – according to some – inside mosques which receive free energy in Iran. Masha Alimardani, a human rights and technology researcher at Oxford, Tweeted this last month:
Mosques receive free energy in Iran. Iranians have set up Bitcoin miners in them. There’s around 100 here, producing around $260,000 USD a year. This money goes a long way in Iran’s choked sanctioned economy. https://t.co/fczwdqCPAd
— mahsa alimardani 🌒 (@maasalan) June 26, 2019
Mostafa Rajabi Mashhadi, a spokesman for the Ministry of Energy, said in June that the power needed for mining a single Bitcoin would be enough to supply 24 residential units for one year.
Despite its ban on trading cryptocurrency, Iran drafted a bill last year on the possible adoption of a national digital currency to facilitate trade with those country’s that still deal with it.
Crippling US sanctions means dollar-trade is all but impossible and the country’s Supreme Cyberspace Council believes the introduction of a national crpytocurrency could help circumvent the sanctions.
In May this year the central bank announced it had begun work on a national blockchain which it plans to use to overhaul the country’s financial sector.