12M Iranians Own A Crypto Wallet – Why?

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In recent months, a growing number of Iranians have begun to invest in decentralized digital assets, according to the Financial Times. According to research published by the Financial Tribune, more than 88% of all transactions are completed using local exchange platforms.

In a statement, the CEO of Bitestan, Hamed Mirzaei, one of the country’s crypto exchanges, revealed that “an estimated 7 – 12 million Iranians” are cryptocurrency owners. Hamed Mirzaei said, “Although there is no government supervision over bitcoin business in Iran, it is estimated that the country’s daily cryptocurrency transactions amount to between thirty and fifty trillion rials ($181 million).”

It was just a few days before Mirzaei’s statements that the Iranian government voiced worry about cryptocurrency legislation. After seeing a major drop in transaction volume since last summer, digital currency trading platforms were charged with taking advantage of the stock market’s instability in May 2021. The (CBI) Central Bank of Iran has issued a warning to people against investing in cryptocurrencies, stating that such investments are done at the investor’s own risk. In addition, the Iranian Parliament requested that National Tax Administration produce a list of the owners of cryptocurrency exchanges in the country. It is not enough, according to Mohammad Baqer Qalibaf, Speaker of a Majlis, to simply prohibit cryptocurrency trading. He has called on the Central Bank of Iran to adopt specific laws for the industry.

The Iranian Government’s Position On Bitcoin (BTC)

Iran is responsible for 4.5% of the total global Bitcoin-mining activity. Cryptocurrency enables the nation to get around sanctions and purchase foreign commodities. According to analysts, the majority of people who conduct Bitcoin transactions & pay commissions to Iran’s miners are located in the United States, which was the nation that imposed the sanctions on the country in the first place.

Iranian miners utilize roughly 600 MW of power every year; to generate that amount of electricity, nearly 10 million barrels of crude oil are required.

Last May, the Central Bank of Iran granted permission for ‘licensed’ cryptocurrency miners to re-enter the market. The government did not provide any details on how it wants to monitor the entry of foreign digital assets into Iran, or how it plans to prevent them from entering the country’s territorial waters. Experts think that to do so, Iranian officials are attempting to stem the flow of money into the country as a result of a recent wave of local currency devaluations. 

Over the period January 2017 to January 2021, the value of the Iranian rial plummeted by 80%, whereas the value of Bitcoin increased by nearly 4000% during the same period.Iran will enable Bitcoin miners to legally generate the cryptocurrency at local power stations starting in 2020. The nation boasts the lowest power prices in the world, which makes it particularly appealing to Bitcoin miners, who want low-cost electricity and a cold temperature in order to maximize profitability.

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