ICT Minister Muhammad Javad Azari Jahromi has proposed transforming Iran’s Kish Island in the Persian Gulf into a hub for domestic and international cryptocurrency exchanges. This is while policy and decision makers have yet to announce an unambiguous stance on crypto trade.
“Kish has the infrastructure to emerge as a hub for international crypto exchanges in the region. Authorities need to start talks with neighboring countries,” he was quoted as saying by IRNA during a visit to the picturesque island and tourist resort.
Mining virtual currency is legal in Iran and miners are allowed to operate under rules approved by the government in July 2019. However, trade in cryptocurrency is banned even though recently the Central Bank of Iran said banks and licensed moneychangers can use the digital currency mined by authorized miners in Iran to pay for imports.
Kish Island Free Trade Zone is a 91-square-kilometer resort off the Persian Gulf in south Iran and is planned to become a “financial free zone.”
Miners can use excess output of power grids in the Kish free and special economic zones. Power generated in the FTZs cannot be used in the mainland nor can it be traded. Therefore, the excess production can be used for cryptomining.
Twelve cryptomining farms are operating in Kish Island, Maku and Aras free trade zones as well as in Payam Special Economic Zone in Alborz Province, Shiraz Bushehr and Rafsanjan special economic zones.
The minister’s proposal comes amid efforts by policymakers to work out regulations for crypto exchanges.
The sharp increase in cryptocurrency investment in recent months and wild fluctuations in its prices prompted officials to announce some measures to help protect investors’ assets and prevent the negative effects of further global fluctuations in cryptocurrency value.
However, the issue is more complicated than previous regulatory challenges and no state body wants responsibility and get involved if problems arise, which is likely.
The High Council of Cyberspace sees the entire crypto enterprise as a source of concern. Abolfazl Rouhani, the council’s deputy chief, said that the council is against using cryptocurrencies mined outside the country, such as bitcoins.
“It is not clear who has developed cryptocurrencies. We have no precise information about those who have invested in the digital currencies. As such, we do not encourage investors to put their money into digital assets,” ISNA quoted him as saying on Tuesday.
“Cryptos could help the country bypass sanctions in a limited number of cases,” he concurred, but stressed that “The Central Bank of Iran should come up with a clear approach to this effect.
Last month the CBI said it was in no hurry to announce new procedures for cryptocurrency exchanges and is planning a roadmap for managing the crypto market in collaboration with state institutions, including the High Council of Cyberspace.
Media outlets later published a letter from Mahmoud Vaezi, President Hassan Rouhani’s chief of staff, in which the CBI was asked not to block cryptocurrency exchanges. The call was in response to a petition signed by 60,000 plus people involved in the crypto business.