Category Archives: Iran

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Chinese Miners Struggle for Easy Ride in Iran

Things aren’t turning out to be smooth for Chinese Bitcoin miners heading into Iran to profit from cheaper electricity rates.

Long before China hinted it may consider halting Bitcoin mining projects, the exodus began and Iran recently became a hotspot for miners along with parts of South East Asia such as Vietnam and Cambodia. China’s National Development and Reform Commission (NDRC) is now looking to siphon off a number of industries which include cryptocurrency mining as part of a state cleanup.

The Iranian venture for many of those Chinese miners deciding to make the move has gone sour, and reports coming back from Iran highlight some of the issues which have made the Middle East less attractive than was at first perceived.

One issue has been getting the equipment across the Iranian border. One miner Liu Feng reported that the chance of losing equipment at the border has become common, with Iranian customs confiscating at least 40,000 crypto mining rigs to date. Some rigs can be sneaked through if presented as non-mining processors for those lucky enough to be able to strike up a deal with customs officials. Feng explains the reason for the confiscations:

“Because of [Iran’s] huge electricity subsidy, the government has added this energy-hungry device (bitcoin miner) to the list of 2,000 banned shipments to come in.”

The same mining enthusiast, Lui Feng also had problems pricing his electricity supply with a local supplier after his supply tariff was doubled just two months into operation. A subsequent set up resulted in angry locals complaining about the noise emitted from his rigs, resulting in miners being confiscated.

Despite these hurdles, Chinese Bitcoin miners are still optimistic that it can get better for them in Iran. With the Iranian government now accepting crypto mining as a legal activity, Iran’s President Hassan Rouhani is behind a new cloud computing industrial park. Also, there are rumors that Tehran may get behind the import of Bitcoin mining hardware.

Currently, the Islamic Revolutionary Guard Corps are still detaining or confiscating machines at border points with tough import rules still in place.

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Iranians Still Back Bitcoin, US Treasury Tightens Stranglehold

Iranians Still Back Bitcoin, US Treasury Tightens Stranglehold

As US sanctions continue to bite in Iran, Bitcoin and Bitcoin mining continue to serve as alternatives to circumvent banking institutions. However, these activities are now firmly under the US radar.

Many Iranians have adopted the digital currency both in their own country and overseas to sidestep economic sanctions. The UK, traditionally a long-time favorite location for students, has also been hit. In November, SWIFT suspended several Iranian banks from its service after the imposition of United States nuclear sanctions on Tehran. This has resulted in difficulties for Iranian students in the UK when obtaining cash.

Many universities are now advising students to return to Iran and return back to the UK with sufficient cash funds to pay for courses and living expenses. Consequently, some Iranian students have turned to Bitcoin, obtaining their fiat funds through crypto exchanges.

The latest problem for Iranian Bitcoin users, many of then students, is that the sanctions are now extending their reach to certain providers. International crypto exchanges, including Bittrex and Binance, have also begun complying with the sanctions against Iran and have stopped dealing with Iranian clients.

The US Treasury is now warning digital marketplaces that either conduct Bitcoin business or sell computers for potential mining that they must stop providing services to Iranians, well aware that Bitcoin is being used in order to circumvent sanctions.

One Iranian miner speaking to the New York Times from a desert location outside of Tehran, explained that even using outdated Chinese A9Antminers has a purpose. “I guess this is the last place on earth where they are still profitable,” said the operator, wishing to remain anonymous. “We’ll have two engineers on site to keep everything running, that’s it,” said Behzad, CEO of IranAsic, the company running the site.

Such farms are popping up around the country aided by generous government power subsidies for electricity which is already cheap compared to the US and Europe. So cheap, it is now drawing interest from investors in Europe, Russia, and Asia.

 

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Iran Central Bank Puts Pressure on Bitcoin Payments

Iran Central Bank Puts Pressure on Bitcoin Payments

A new plan released today indicates that the Central Bank of Iran is to block the use of unapproved cryptocurrencies as a means of payment.

The new report entitled “Obligations and Rules Regarding Cryptocurrencies” was released by the central bank claiming that “any cryptocurrency wallets will be used only for holding and transferring cryptocurrencies and integrating any kind of services in wallets using cryptocurrencies is forbidden”.

As the description is quite vague, it is currently not clear what will constitute unapproved cryptocurrencies under the new Central Bank rules although it has been indicated that regulators are looking for all Bitcoin transactions to be settled in Iran’s national currency, the rial.

Although once this is clarified such cryptocurrencies won’t be able to be used as a mean of payment it won’t stop users holding or transferring them, providing they fall into the category of being approved. The report also targets Iranians holding cryptocurrencies, suggesting that if the bill is passed they could be restricted to holding large amounts of cryptocurrency in the same way they are restricted to fiat maximum. The current limit in Iran is EUR 10,000 outside of their normal accounts.

Local sources claim that the measures are aimed at protecting the struggling rial from more competition. In 2018, the rial lost a staggering 60% of its value due to Iran being hit by further swingeing sanctions from the US. This despite the International Atomic Energy Agency indicating that it had been complying with the restrictions to its nuclear program laid down in the 2015 Joint Comprehensive Plan of Action (JCPOA).

Iran has seen P2P website Localbitcoins.com volume rocketing in times of unrest, such as during the government protests in late 2017 and then again recently after the abandonment of the 2015 nuclear deal by the US.

Another indication of a tightening of the rules which surround Iran’s crypto community is the new requirement for exchanges to seek licenses before doing business, although as yet this hasn’t been enforced and has no projected launch date.

 

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Venezuelan Turmoil Sees $10 Million Spurt on LocalBitcoins

Venezuelan Turmoil Sees  Million Spurt on LocalBitcoins

With the country in turmoil and Venezuela‘s future more uncertain than at any point since 1999 when Hugo Chavez first became president, the trade in Bitcoin has peaked, recording USD 10 million in trading on P2P platform LocalBitcoins in just seven days.

In the past week, the country was thrown into turmoil when Juan Guaido proclaimed himself unofficially as the country’s new president. With Nicolas Maduro still incumbent, Bitcoin P2P trades hit their second-highest weekly total ever. The cryptocurrency, albeit driven underground by the Maduro regime, has been supporting many of those nationals choosing to remain in the country rather than fleeing to neighboring Columbia in order to escape poverty.

As the situation becomes more explosive by the day, and with both Iran and Russia warning the US, who have backed the Maduro presidency, to stay out of Venezuela, nationals are again putting their faith in Bitcoin. In the last week, more Bolivars for Bitcoins were traded than ever before, despite the weakness of the national currency.

It can’t be confirmed if perhaps some of this activity may be due to Guaido’s liberal stance on cryptocurrency and the possibility of a new regime, but the rush on Bitcoin, coinciding with a dump of the bolivar, is unprecedented.

Maduro’s attempts to withdraw the country’s gold supplies this week, having already expelled US diplomats, was thwarted by the Bank of England who currently holds Venezuela’s USD 1.2 billion reserves. As Harvard economist explained, having communicated with Guaido:

“The first rule of business as we speak is to stop the Maduro government from liquidating international assets of the country and steal them.”

 

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Iran State-Backed Crypto Official Announcement Tomorrow

Iran State-Back Crypto Official Announcement Expected 29th January

A national cryptocurrency in Iran has been in speculation for months, but the official announcement for the launch is anticipated to finally come at the annual two-day Electronic Banking and Payment Systems conference.

The conference begins on 29 January in the nation’s capital, Tehran, with the theme this year being ”blockchain revolution”.

The primary reason Iran is speculated to be launching the cryptocurrency is to circumvent US sanctions that have the country cut off from the global financial system. Plans for the cryptocurrency were first revealed in Summer 2018 when US President Donald Trump claimed Iran was enacting “malign activities”, and the economy has only suffered further blows since then.

In November 2018, some banks were barred from using the cross-border payment system SWIFT which has left the country struggling to pay for imports or collect export payments. The Iranian cryptocurrency has been proposed firstly to establish a new national payment network, but the government most crucially believe it will put the country back in the game of international finance, this time in a blockchain-based system.

In April 2018, Iran prohibited all financial institutions from handling or facilitating cryptocurrencies under the pretense of money laundering and criminal activity concerns. However, the ban has been more associated more likely to act as a way of preventing a capital exodus from the country.

 

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Iran’s Proposed Rial Revaluation Could Open Door for Bitcoin

Iran’s Proposed Rial Revaluation Could Open Door for Bitcoin

The Central Bank of Iran is proposing a further step towards the long-debated revaluation of the country’s national currency, the rial. It paves the way for Bitcoin to find more prominence in an already struggling economy.

Central Bank governor Abdolnaser Hemmati made the following comments yesterday, suggesting that government mismanagement has finally led to the government being forced to take drastic economic measures: “A bill to remove four zeros from the national currency was presented to the government by the central bank yesterday and I hope this matter can be concluded as soon as possible.”

As a result of disruption to the economy, much of it a direct effect of US sanctions against Iran, crypto adoption has continued to grow much in the same way as it has in Venezuela prior to this week’s upheaval in that country, which has now come to head with fears of a military coup to physically oust President Maduro.

In 2018, the rial lost a staggering 60% of its value due to Iran being hit by further swingeing sanctions from the US. This despite the International Atomic Energy Agency indicating that it had been complying with the restrictions to its nuclear program laid down in the 2015 Joint Comprehensive Plan of Action (JCPOA).

Critics of such economic measures suggest that a re-denomination of the rial would have little effect, particularly given other nations attempt to shave zeros from struggling currencies over the years, namely Brazil, Zimbabwe and more recently, Venezuela in an attempt to breathe new life into the near-worthless bolivar.

Conditions such as these often bode well for digital currencies, as nationals seek some form of financial certainty, lacking in their own national currencies. This has been the case in Iran with P2P website Localbitcoins.com volume rocketing in times of unrest, such as during the government protests in late 2017 and then again after recent abandonment of the 2015 nuclear deal by the US recently.

Computer network and security administrator Abed Pariazar says that as dollars become rarer crypto becomes an option, arguing, “Use of cryptocurrency will increase this year. Our currency will lose its value as inflation is an endless road.”

Pariazar added, “My income is based on rial and if I keep it I will lose it all in the near future. I can’t change to [the US] dollar easily so, for this reason, I prefer to change my income to cryptocurrency. More and more people are doing this.”

Maintenance technician Milad Boroumand explained, “In my country, most of the people change their money from rial to United States dollars or the euro, but at the current time we have a few sources of Bitcoin to invest in.” He added that he can see the numbers of people using cryptocurrency in Iran doubling or even tripling as internet use becomes more commonplace throughout the country.

 

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De-Dollarization: Russia’s Controversial $10 Billion Bitcoin Investment Rumor

De-Dollarization

Reports of a probable investment in Bitcoin by the Russia Federation in values of USD 10 billion, targeted at evading US sanctions, are making headlines.

Most of the reports cite Russian economist Vladislav Ginko, who claimed to work with his state government. He took to Twitter responding to crypto analyst Chris Burniske‘s assessment of blockchain’s value (monetary perspective) relative to global asset values.

5/ Take global asset values:

Gold: $7.7T
Stock Markets: $73T
Broad-Money: $90T
Debt: $215T
Real Estate: $217T
Derivatives (low-end): $544T

Placing the world over $1 quadrillion in value, where monies most broadly defined represent < 10% of that value.https://t.co/Rvq5ISNvyU

— Chris Burniske (@cburniske) January 6, 2019

Vladislav inferred in his Tweet that Russia’s role in Bitcoin adoption will be highlighted when the country would have invested “almost USD 470 billion [of its] reserves into Bitcoins”, further making a conjecture that he expects USD 10 billion to be the minimum investment by the end of the first quarter of this year.

Chris, I believe sitting here in Moscow, Russia, that the real factor of Bitcoin apotion will be when Russian government I’m working for will start investing almost $470 billion reserves into Bitcoins. I expect that it’ll be at least $10 billion in the first quarter of this year.

— Vladislav Ginko (@martik) January 6, 2019

Vladislav further said that the intended “de-dollarization is actually forced by US sanctions when Russia is going to be almost switched off from US payments for its oil & gas”, referring to the alleged proposed investment in Bitcoin.
Indeed, the US Congress had imposed sanctions on Russia after the assertion of US intelligence agencies claiming that Russia interfered with the 2016 Presidential election and the alleged poisoning of former Russian military officer Sergei Skripal.

Although President Vladimir Putin has recently recognized the place of cryptocurrency in finance, he has given no hint as to when such a venture would be possible within the Russian Federation.

So far, the Russian government has made no official statement regarding the news about the Bitcoin investment. At best it’s conjecture, and if it isn’t, turning to Bitcoin to boycott US sanctions may not turn out so well for the Russian government in terms of trade relations, taking an example of how Iran and Venezuela’s plans to bypass US sanctions using cryptocurrencies are being foiled.

However, the possibility of considering a decentralized currency such as Bitcoin may not be as easily dismissed as news of Russia dumping USD 101 billion for euro and yuan in its recent de-dollarization plan was a laudable attempt to seek an alternative to the Greenback.

 

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Crypto vs Gold Debate Heats Up at Israeli Conference

Crypto vs Gold Debate Heats Up at Israeli Conference

American computer scientist and cryptographer Nick Szabo has suggested that cryptocurrencies such as Bitcoin will begin to be used far more frequently as rescue packages for struggling economies, particularly in nations hit by sanctions, and that gold will be heavily supplemented by cryptocurrency in the future.

Countries currently facing sanctions from the US alone include Cuba, Venezuela, North Korea, Iran, Zimbabwe, Syria, Russia, Somalia, Sudan, and Yemen. To date, Venezuela has been the most prominent in adopting a cryptocurrency solution for its failing economy, with Zimbabwe and Iran also turning to a central bank cryptocurrency to fight economic pressure and sanctions.

Zimbabwe’s central bank imported over USD 400 million last year in an attempt to ease the cash shortage, with citizens traveling to border towns South Africa to access cash from international banks, in a virtually cashless economy. During the past six months, the country has shifted from a total ban on cryptocurrency to viewing it as a solution to its economic plight.

At the recent Israel Bitcoin Summit in Tel Aviv, Szabo said that hyperinflated countries are increasingly turning to cryptocurrency and central banks will show a greater dependency on digital currencies to supplement gold reserves moving forward. He also referred to gold’s historical vulnerability as a reason for promoting cryptocurrency as a global reserve, arguing:

“The other problem with gold reserves is that they’re physically vulnerable. When the Nazis conquered countries in Europe, the first place they went to was a central bank’s gold reserves.”

At the same conference, Israel’s Head of the National Economic Council, Avi Simhon, made comments that Bitcoin technology was inefficient and would consequently become obsolete, a suggestion that Szabo refuted.

Reportedly, Szabo’s comments were in response to the statements made by Simhon claiming that cryptocurrencies will be the future, and nations will turn to crypto over gold, given time.

 

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Iran Reinforces Its Stance Against Telegram Crypto

Iran Reinforces its Stance Against Telegram Crypto

The Iranian government has reinforced its position on the ban of Telegram messaging app in a recent post by the Tehran Times yesterday.

According to the news outlet, the Secretary of Criminal Content Definition Task Force Javad Javidnia said: “One of the most important factors in banning Telegram was a sense of serious economic threat from its activities.”

The authorities have also issued warning against those with intent to support the native cryptocurrency of the app Gram, saying that “any cooperation with Telegram messaging app to launch Gram, the messaging app’s cryptocurrency, in Iran constitutes an action against national security and will be dealt with as a disruption to the national economy.”

The Iranian government has been hostile towards the Telegram messaging app since the political rouse in December 2017.  It was also reported that head of Iran’s High Council for Cyberspace Hassan Firouzabadi, wrote in an op-ed that it was not in Iran’s interest to continue allowing access to Telegram inside the country. The government decided to ban its use or association with its tokens in the region since early 2018.

Telegram is well known for its high-end encryption model as well as for being the go-to app for crypto-related community building. It was involved in a seed funding round where it raised USD 1.7 billion, notably one of the most successful crowdfunding in 2018.

Iran had criticized the Telegram ICO giving the impression that it “undermined the national currency.” However, in a recent development, the Iranian government was in the process of developing its own cryptocurrency in an attempt to undermine the sanctions being imposed by the US which is currently taking a toll on the economy.

Iran is not the only one against the messaging platform. The Russian government has also made attempts to ban the messaging app when it refused to hand over its encryption keys. Efforts to that end have proven to be unsuccessful so far.

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US Attempts to Foil Iran’s Proposed Sanction-Busting Crypto

US Attempts to Foil Iran's Proposed Sanction-Busting Crypto

The US Congress is introducing draft legislation that could steamroll any plans that Iran has to effectively beat sanctions through adopting a national cryptocurrency. Iranian officials have declared that a sanction-breaker cryptocurrency is being implemented shortly.

The new legislation now passing through Congress to become law would ban US citizens from any transactions in which Iranian cryptocurrency is used.

Draft legislation has been introduced by the US Congress in order to prevent damaging the nation’s sanctions imposed on Iran. If made law, the proposed ‘Blocking Iran Illicit Finance Act’ would impose sanctions on any foreign nationals who are seen to support the development of an Iranian national cryptocurrency.

This after Iran declared last month its national cryptocurrency was ready to be deployed, as the US sanctions go into full effect. The goal of the national cryptocurrency is to conduct international business since Iran’s international payment systems have been crippled. The international payments network SWIFT has also severed ties with Iranian banks. Additionally, due to the sanctions, Bittrex and Binance have stopped serving Iranian customers. Essentially, it is illegal for any company that does business in the United States to also do business in Iran.

The bill proposal states that “all transactions related to, provision of financing for, and other dealings in Iranian digital currency by a United States person or within the United States are prohibited”.

President Trump has also stated that bank accounts overseas could also be blocked along with any property transactions in the US involving Iran, plus foreigners could be banned from entering the US if associated with an Iranian cryptocurrency transaction.

If issued, Iran will control the supply of the cryptocurrency through the country’s central bank backed by the rial, Iran’s national currency. Coins won’t be mined and transaction records will be limited to an inaccessible private blockchain.

Elsewhere in the country are voices that appear to endorse the use of blockchain. Last week, the head of management development department of the Vice Presidency for Science and Technology, Alireza Daliri, commented that blockchain could improve the Iranian economy.

 

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