In a strategic shift in its stance on digital currency, Iran has decided to regulate the crypto industry instead of restricting it.
This decision was announced by the Minister of Economic and Financial Affairs Abdolnaser Hemmati at a national event in Tehran, where he said that they intend to reduce the risks associated with crypto while reaping all its benefits.
The country’s Central Bank will manage all digital assets. From setting the regulatory framework and helping financial institutions to adopt digital assets to monitoring transactions and ensuring compliance, it all lies with the Central Bank.
It has already published a set of guidelines on tax compliance and anti-money laundering measures.
Currently, Iranian investors hold between $30B and $50B of crypto assets, roughly one-third of the company’s total gold market.
Critical Decision Time
The timing of this decision could not have been better. Hemmati believes that will have several benefits:
- To attract local and foreign investors
- Create more jobs and promote youth employment
- Integrate Iran with the global economy and facilitate its access to a wide range of financial services (those that only allow crypto transactions)
But there is one major reason that trumps everything else – immunity from punishment. As Donald Trump prepares for his second term in the White House, Iran must strengthen itself.
During Trump’s first term as president, he canceled the Iran nuclear deal. One of the reasons he mentioned is that the deal was one-sided, benefiting Iran a lot and not bringing much of the peace it promised to other countries.
Be careful: The Iran Nuclear Agreement, also known as the Joint Comprehensive Plan of Action (JCPOA), is a landmark agreement between Iran and the world’s major powers (including the USA) in which Iran promised to dismantle its nuclear program and allow other countries to . to conduct thorough inspections of its nuclear facilities in exchange for relief from billions of dollars worth of sanctions.
Will the US Release Sanctions?
Since the sanctions were reinstated, Iran’s economy was hit hard, and the country has been struggling ever since. So, now that Trump is back, there are rumors that he might renew what he calls the ‘high pressure policy’ against Iran with more sanctions.
The chances of this policy being renewed seem low. JPMorgan analyst Arun Jayaram says imposing more sanctions on Iran could significantly affect global oil supplies, removing nearly 1 million barrels of oil per day from the supply chain. But you can’t with Trump, so Iran wisely decided to buckle up.
Iran made another compromise as well. For example, on Tuesday, the UN announced that Iran has decided to stop producing enriched uranium that can be used to make bombs.
Also, the new Iranian President Masoud Pezeshkian had previously said that establishing good relations with the West, getting relief from sanctions, and restoring ‘normality’ to the Iranian people is his main goal this term.
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