Free Trade Zones

Minister proposes Kish Island as crypto clearinghouse


ICT Minister Muhammad Javad Azari Jahromi has proposed transforming the Iranian island of Kish in the Persian Gulf into a hub for domestic and international cryptocurrency exchanges. This is when policymakers and policymakers have yet to announce an unambiguous position on crypto trading.
“Kish has the infrastructure to become a hub for international crypto exchanges in the region. The authorities must begin talks with neighboring countries,” he told IRNA during a visit to the region. picturesque island and tourist resort.
Virtual currency mining is legal in Iran and miners are allowed to operate under rules approved by the government in July 2019. However, cryptocurrency trading is banned although recently the Central Bank of Iran said that banks and licensed money changers can use digital currency mined by miners authorized in Iran to pay for imports.
The Kish Island Free Zone is a 91 square kilometer resort town off the Persian Gulf in southern Iran and is expected to become a “financial free zone”.
Miners can use excess production from the power grids in the Kish Free and Special Economic Zones. Electricity produced in free zones cannot be used on the continent and cannot be marketed. Therefore, the excess production can be used for cryptomining.
Twelve cryptomining farms operate in the Free Zones of Kish Island, Maku and Aras, as well as the Payam Special Economic Zone in Alborz Province, Shiraz Bushehr and Rafsanjan Special Economic Zones.

Regulatory challenges

The minister’s proposal comes amid efforts by policymakers to craft regulations for crypto exchanges.
The sharp increase in cryptocurrency investments in recent months and the sharp swings in its prices have prompted officials to announce certain measures to help protect investor assets and prevent the negative effects of further global fluctuations in the value of crypto. -coins.
However, the matter is more complicated than previous regulatory challenges and no public body wants to be responsible and involved if problems arise, which is likely.
The High Council of Cyberspace sees the entire crypto business as a source of concern. Abolfazl Rouhani, the deputy head of the council, said the council is against the use of cryptocurrencies mined outside the country, such as bitcoins.
“It is not known who developed the cryptocurrencies. We do not have specific information on who invested in digital currencies. As such, we do not encourage investors to invest their money in digital assets, ”he told ISNA on Tuesday.
“Cryptos could help the country circumvent sanctions in a limited number of cases,” he acknowledged, 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 rush to announce new procedures for cryptocurrency exchanges and was planning a roadmap to manage the crypto market in collaboration with the institutions of the State, including the High Council of Cyberspace.
The media then published a letter from Mahmoud Vaezi, Chief of Staff to President Hassan Rouhani, asking the CBI not to block cryptocurrency exchanges. The call followed a petition signed by more than 60,000 people involved in the crypto industry.