Iran Shifts Strategy to Regulate Crypto Industry Amid Sanctions
Iran has shifted its approach to digital currency, opting to regulate the crypto industry rather than impose restrictions. This decision was announced by Minister of Economic Affairs and Finance Abdolnaser Hemmati at a national event in Tehran, emphasizing the goal of minimizing risks while maximizing benefits from crypto.
The Central Bank of Iran will oversee digital asset management, including establishing regulatory frameworks, assisting financial institutions with digital assets, monitoring transactions, and ensuring compliance. Guidelines on tax compliance and anti-money laundering measures have already been published.
Currently, Iranian investors hold between $30 billion and $50 billion in crypto assets, which represents approximately one-third of the country's total gold market.
The Crucial Timing of the Decision
This decision comes at a strategic time, with several anticipated benefits:
- Attracting domestic and foreign investors
- Creating job opportunities for youth
- Integrating Iran with the global economy and providing access to a wider range of financial services that accept crypto transactions
A significant motivation behind this move is protection from sanctions, especially with Donald Trump potentially returning to the White House. During his first term, Trump withdrew from the Iran nuclear deal, citing it as one-sided and not beneficial to other countries.
The Iran Nuclear Deal, or Joint Comprehensive Plan of Action (JCPOA), involved Iran agreeing to dismantle its nuclear program in exchange for sanctions relief.
With renewed sanctions having severely impacted Iran's economy, there are speculations about Trump's possible revival of the 'maximum pressure policy' against Iran. However, JPMorgan analyst Arun Jayaram notes that new sanctions could significantly disrupt global oil supply, removing about 1 million barrels per day from circulation. Iran is preparing for any eventuality.
Additionally, Iran is making other compromises, such as halting enriched uranium production, which could be used for weaponry. New Iranian President Masoud Pezeshkian has also expressed a desire to establish better relations with the West to alleviate sanctions and restore normalcy for Iranians.