Abdol Nasser Hemmati, the governor of the Central Bank of Iran (CBI), announced yesterday that the government plans to authorise the mining of digital assets in the nation. However, those running computer systems to profit from their support of cryptocurrency networks will be charged for electricity at the country’s export price rather than the cheaper, subsidised rate.
Iran has reportedly become quite the hot spot for Bitcoin mining in recent months, thanks largely to its generous electricity subsidy. There are even reports of Chinesecryptocurrency miners relocating to the country to take advantage of the cheap rates.
New Executive Law to Authorise Cryptocurrency Mining in Iran
According to a report in domestic news publication PressTV, the governor of the CBI stated yesterday that the national government has already approved sections of an executive law that would allow for the mining of cryptocurrency by Iranian citizens.
Cryptocurrency miners are always on the lookout for cheap electricity to run the required sophisticated computer systems.
Abdol Nasser Hemmati added that there would be conditions to the authorisation. Firstly, he stated that the electricity rate charged to those mining cryptocurrency would be at the nation’s export rate. This ranges from about 7c to 10c per watt. Previously, many of the nation’s digital asset miners were using the heavily subsidised rate charged to regular Iranian citizens. At just 5c per watt, it’s understandable why such a surge in the activity has been reported lately.
The second condition stated by the bank governor was that mined cryptocurrency should “be fed back to the national economic cycle.” Presumably, this is a measure intended to crack down on the Chinese miners suspected of setting up in Iran to take advantage of the low-cost energy.
Interestingly, Hemmati added that any new currencies backed by other assets – currencies, gold, or anything else – would not be permitted by the CBI.
The announcement by the Iranian central banker comes as something of a surprise given recent events in the nation. The surge in the numbers of cryptocurrency miners exploiting the subsidised power there forced authorities to launch a crackdown. In the process, they reportedly seized thousands of computer systems from factories, greenhouses, mosques, and other locations.
Perhaps more baffling is the fact that cryptocurrency trading is currently illegal in Iran. NewsBTC reported on the nation’s deputy governor for new technologies confirming as such earlier this week. Those prosecuted for the activity could serve up to five years in jail. How the newly-authorised Iranian cryptocurrency miners are supposed to sell the cryptocurrency they are rewarded is anyone’s guess.
Many analysts have previously stated that Iran could benefit from adopting a cryptocurrency as a way to counteract the US economic sanctions against it. However, judging by its stance towards the technology in recent years, the nation seems more cautious to explore this, or better at hiding it, than the likes of North Korea.
Libra’s presence on Weibo grows; China senses competition for Alipay and WeChat
Libra, Facebook’s much-talked about cryptocurrency, has not only gotten the United States riled up, but has also breached its shores to disrupt the Chinese market. A recent analysis of Weibo, China’s alternative to Twitter, has revealed that Libra was the second most searched entity on the social media platform.
To be exact, the term ‘Libra will compete with Alipay and WeChat’ was trending on China’s social media space in the wake of the debates going on in the U.S. Congress over the week. Some cryptocurrency enthusiasts had their doubts about the search parameters with @guymp, an e-commerce researcher, tweeting,
1.) Libra is extremely unlikely to be allowed to operate in China
2.) Alipay/WeChatPay user account are *by design* almost completely nonexistent outside of China.”
Several countries have started talking about the Mark Zuckerberg-led cryptocurrency and China’s interest in the asset has only managed to pull more people into the digital asset industry. Some proponents of the space have also speculated that China is simultaneously working on their own crypto-project to rival that of Facebook and Bitcoin. Anthony Pompliano, CEO of Morgan Creek Digital Capital, had recently stated,
“China is accelerating those plans in response to Libra. They are very worried about Libra being very US-dominated or regulated by the U.S., they feel like the digital currency would give the US an advantage over China. So China is going to push forward and accelerate to build a central bank regulated digital currency.”
Libra’s worldwide reach is not just based on speculation, but rather on hard research. A recent TIE report had touched on Libra’s dominance in the Twitterverse, which included search hits in the U.S. and the United Kingdom. TIE reported that tweets about Libra accounted for 43.8 percent of all crypto-related tweets in the United States, out of which 54.8 percent were negative.
The UK however, had a different outlook towards Facebook’s cryptocurrency, with a majority of the sample space claiming that Libra would be good for the community.
WATCH: Lukka CEO Believes in a Future Full of Corporate Tokens
Jake Benson is a long-time industry entrepreneur and the CEO and Founder of Lukka, a comprehensive tool for calculating capital gains taxes for cryptocurrency. In this clip he and CoinDesk Editor Pete Rizzo talk about a future where corporate tokens aren’t a “surprise.”
“It’s not a surprise to me that inevitably corporations they’re going after creating their own tokens but for Facebook to be one of the first big ones is is pretty much a surprise,” he said.
“If this project is going to be successful I think they absolutely have to satisfy minimum requirements,” he said. “But I would also believe that the onus is on them to sort of demonstrate that there’s additional level of controls and transparency that might be benefits of cryptocurrency that maybe weren’t even possible before.”
Benson expects to see a “more compliant” future… as long as the social media giant can avoid the problem of privacy invasion associated with the platform.
You can read our complete Libra coverage here and watch our CoinDesk LIVE interviews here.
Facebook’s Libra is not a cryptocurrency, claims CoinShares’ Meltem Demirors
The largest cryptocurrency in the world, Bitcoin [BTC], saw a drastic fall in its price on July 16, as U.S. legislators sharpened their arguments against crypto and its viability. Bitcoin noted a fall of 12% in its price and was being traded at $9,591, at press time.
However, providing support to the coin was Meltem Demirors, CSO of CoinShares, who opined about the difference between Bitcoin and Libra, and how imitators of currency should be seen for facts. Demirors said,
“I urge to view Bitcoin as open pubic networks that enable innovation and growth, and to treat Libra and its future imitators, and there will be many, in the context of the facts- private efforts led by corporations holding billions of dollars of public’s money. “
In an interview with CNBC, the CSO clarified that the question is not about Libra being dangerous. The question is, what is Libra? It is trying to be a cryptocurrency, but the facts are that Libra holds assets including US dollars and government securities and is essentially, holding public’s funds.
Demirors elaborated on the same in her statement to the House of Representatives,
“We’re seeing a wave of interesting cryptocurrencies and countless imitators which borrow some features but are decidedly not cryptocurrencies. Libra is not a cryptocurrency. “
Cryptocurrencies are here to stay and this has been said time and time again. However, with skepticism playing its part, the need for Libra to be regulated has been marked as urgent. Even though Bitcoin is not regulated since it is a technology, the businesses built on top of it are.
Even though there remains a fair bit of uncertainty about the United States’ regulatory stance, for now, lawmakers are very aware that regulatory clarity is tantamount, with a number of efforts underway. The Token Taxonomy Act is one such step, and would exclude cryptocurrencies from being classified as securities.
Demirors added that it might be too early to say whether any regulations will be applied on crypto, but there could be a formation of two committees; One, that would focus on the issue of cryptocurrencies and two, a subcommittee that focuses on the issue of Libra. The CSO concluded that she was cautiously optimistic about growing clarity in crypto-regulations, with Demirors claiming that the debate created much-needed political momentum.