The price of bitcoin has increased rapidly in Iran on September 5 when the Iranian Rial plummeted and after the current and seventh President of Iran, Hassan Rouhani, and the government approved the plans to mainstream bitcoin mining. Iran also holds the trophy for having the world’s most expensive bitcoin price.
Bitcoin achieved a new world record of US$ 24,000 (1,010,520,000.00 Iranian Rial as of September 5) on the Iranian exchange EXIR, breaking its previous record of US$ 20,000. The reason for such an increase was due to the investors’ need to find an alternative to the falling Rial. EXIR tweet stated that cryptocurrency bull markets have already begun in Iran as their local currency keeps falling. As of September 5, a single US dollar is equal to 42,105.00 Iranian Rial.
On September 4, Iran officially announced that they will recognize bitcoin mining and other cryptocurrency mining as an industry within 3 weeks. The Secretary of Iran’s Supreme Council of Cyberspace, Abolhassan Firouzabadi, mentioned that the Central Bank of Iran is going to draft a policy framework for the industry.
Firouzabadi told IBENA, a specialized news agency affiliated to the Central Bank of Iran, that snowballing the use of cryptocurrencies is expected to smooth the trade between Tehran and their partners, especially in the light of the US sanctions. IBENA responded by saying that the declaration of the final policy for legislating cryptocurrency mining hasn’t happened yet.
The price in the Iranian republic increased to about 40% in the last 3 weeks which is increasing at a faster rate than the global average as per the EXIR tweet. The factors responsible for such an increase are the declining local currency, certain speculations and the changes to the bitcoin policy.
In February 2018, the Venezuelan government issued a digital currency named Petro which was claimed to have been backed by oil. It wasn’t very successful. However, Iran is also looking into cryptocurrencies that are backed by oil, since Iran is the sixth largest oil producer according to bizvibe.com, as an alternative to their local currency.
According to news.bitcoin.com report, the Iranian bitcoin price clearly shows a large gap between the official exchange and the exchange of the streets. This is a reflection on the inflationary pressures that are building upon their economy under US sanctions.