Iran's new law: The government does not recognize cryptocurrency-related transactions, but allows mining under certain conditions

According to Presstv, as more and more people adopt digital currencies as a way to obtain international currency in response to US sanctions, the Iranian government has formulated new rules to regulate the cryptocurrency market.

On August 4, the Iranian cabinet approved and published a bill stating that the Iranian government will not recognize any transaction activities using cryptocurrencies in Iran as legal. The government and banking system will not regard digital currencies as legal tender, and the Central Bank of Iran will not guarantee their value.

However, the bill said that under certain conditions, digital currency mining will be allowed in Iran. For example, if miners obtain approval from Iran's Ministry of Industry, they can mine outside the 30-kilometer border of all provincial centers, but the capital Tehran and the central city of Isfahan will be excluded because of stricter restrictions.

The bill also states that miners should comply with the rules set by Iran's Ministry of Standardization and Communications for mining machines and pay a certain amount of energy fees for mining. Specifically, authorized mining farms should pay for electricity or natural gas used to generate electricity based on Iran's energy export prices.

Mining farms will be taxed like industrial manufacturing units unless the owners return the money earned from their digital currency exports to Iran’s economic cycle. The bill states that if foreigners want to establish mining farms in Iran’s special economic zones, the Iranian Ministry of Industry will delegate authority to the relevant departments of the special economic zones.

The announcement comes more than a month after reports emerged that mining farms were popping up in places in Iran that offer subsidized electricity supply.

While some restrictions have been placed on mining farms, authorities have hinted they will allow cryptocurrency mining because Iran, facing U.S. sanctions, needs a possible source of foreign currency.