Iran's government has approved a set of regulations for trading with cryptocurrencies, a move that potentially allows the country to skirt some U.S. financial sanctions imposed over Tehran's nuclear program.
This news was announced on August 29, just weeks after Iran's Trade Development Organization approved its first official import order -- worth $10 million for the import of cars -- using cryptocurrency.
Trade Minister Seyed Reza Fatemi Amin said the resolution "specifies all issues related to cryptocurrencies, including how to provide fuel and energy for mining them, and how to grant licenses."
The new regulations allow for the import of any goods to the country, a move that could enable Iran to circumvent U.S. sanctions that have crippled the economy and severely weakened the national currency, giving rise to demand in cryptocurrencies, which are less regulated and can be used in transactions by Iranians where Western currencies are banned.
SEE ALSO: Cryptocurrencies Are No Digital Cure-All For Iran, Russia, Other Sanctioned StatesBitcoin and other cryptocurrencies are created through a process known as mining, where powerful computers compete to solve complex mathematical formulas or puzzles. The process requires vast amounts of electricity.
Last year, a Reuters report suggested 4.5 percent of global bitcoin mining was taking place in Iran, partly as a result of the country's cheap electricity, where it is heavily subsidized. U.S. sanctions that bar Iran from accessing the international financial system reportedly have contributed further to the increase in mining activities and the use of cryptocurrencies.
The blockchain technology used in digital currencies allows financial transactions to be made quickly and securely while avoiding large banks.