Iran, US and Australia see major shifts in crypto
The crypto ecosystem has been seeing great volatility in terms of regulation all around the world, and now see 3 major countries take big steps
The countries we will be looking at today are Iran, the United States, and Australia. All 3 are in varying situations, with Iran overturning the Bitcoin mining ban after three months, Australia considering a regulatory framework, and the United States Federal Reserve’s Jerome Powell announcing that they have no intention to ban Bitcoin.
Iran mining ban overturned
Extreme heat has subsided now that summer is over, so the green light has been granted to crypto miners in Iran as the electrical system is not under the pressure they said it was months before.
On 26 May 2021, a three-month restriction on activities was imposed by previous President Hassan Rohani, and now the Iranian Government will allow licenced cryptocurrency miners to begin operations again.
Due to worries over the stability of the energy infrastructure, this initial restriction was put into force. In the summer, the Middle Eastern country had extensive power disruptions, which was blamed on high temperatures by former President Rouhani. The heat was up to 120 degrees Fahrenheit or over 49 degrees Celsius some days.
In light of electricity shortages and the scarcity of water, Rouhani decided to outlaw crypto mining so that people could keep using their air conditioners, but some people have raised concerns about the true level of power miners in the nation actually use. In Iran it is believed that 4.5% to 7% of world crypto-currency mining is carried out within the country. Iran, due to vast fossil fuel resources such as natural gas, might come as no surprise at some of the cheapest power costs in the world.
There are several indications that the country sees Bitcoin mining positively, particularly as a method of avoiding US sanctions. Iran is now under an almost full embargo by the US, which affects the economy of the country severely. The Elliptic via Reuters estimates revenues of about $1 billion at currently projected levels of mining in Iran.
Notwithstanding a prohibition, underground mining has allegedly persisted and news came on Wednesday that Ali Sahraee, Director of the Teheran Stock Exchange (TSE), resigned after state media reports that crypto mining had happened during the ban.
Australian Senator teases regulation
Speaking at NFT Fest, Australian Senator Andrew Bragg teased that crypto legislation was likely to come to fruition in 2022, going on to say that they will want all the major parties to adopt such policies as part of their election manifestos.
Bragg said that the Senate Committee to examine the subject would publisher its findings by the end of October, which will contain legislative guidelines to be enacted over the next 12 months during the virtual NFT Fest event which was backed by Blockchain Australia on Sept. 30.
“The review is due to conclude in about three weeks from now and the promise that I made you, I will keep. We will give you a plan, and that plan will be designed to put Australia at the front end of the digital asset society and the world,” he said.
The Liberal Senator hosted the Senate’s 2021 investigation into “Australia as Technology and Financial Centre,” but yesterday stressed that it was time to establish strong frameworks instead of extending the process with more reviews.
“I think that you deserve more than just a series of recommendations for new inquiries, task forces and further review. So we will be making some hard recommendations. […] We will want the major parties, including my party, to adopt these policies as part of their election manifestos.”
Bragg did not describe the details, but claimed that the plan will contain suggestions for a “robust policy framework” with three objectives: consumer protection, investor promotion and competitiveness in the market.
“Now, for those of you that say we don’t want to have regulation. I would remind you that your industry reps and the vast bulk of the industry is asking for some regulation, so there will be some regulation,” he said.
On the environmental concerns stemming from the energy consumption crypto brings, he explained: “I’ll just put the simple fact that we are trying to get to net zero. We want to get there as soon as we can. I personally think it’s highly, and strongly in our economic interests to transition to a net-zero economy. And in the area of digital assets using a lot of electricity, we want that to happen on a renewable basis.”
“So I think it’s a unique opportunity for the industry to pull this, pull those two things together,” he added.
United States not banning crypto
Testifying before the House Financial Services Committee with regards to COVID-19 and the economy, Federal Reserve Chairman Jerome Powell insisted that they needed to create a legislative framework for the crypto market, pushing back on calls for a blanket ban on Bitcoin or any other digital assets.
Speaking in reaction to Ted Budd (R) of North Carolina, Powell explained that a China-esque restriction on digital assets was not something he considered. In response to Powell’s inquiry, Rep. Budd raises questions about stablecoins regulatory status and the ongoing discussions of the central bank concerning the “digital dollar” as well.
“Stablecoins are like money market funds [and] like bank deposits but they’re, to some extent, outside the regulatory perimeter and it’s appropriate they be regulated,” he said. “Same activity, same regulation.”
For a while, the Fed has been considering a central bank’s digital currency, but political leaders remain uncertain if they are going to pursue the initiative. In the meanwhile, many research papers on the advantages and possible barriers of CBDC are being commissioned by the central bank.
Powell is partly responsible for the setting up of US monetary policy, and supervises the Federal Open Market Committee for the Central Bank. Earlier this month, while it indicated that the pandemic-induced bond buying programme might soon be slowing down, the Board opted to leave its current stimulus measures intact. The warning seems to have placed some downward risk on risk assets, including stocks and cryptocurrency.
For a while, the Fed has been considering a central bank’s digital currency, but political leaders remain uncertain if they are going to pursue the initiative. In the meanwhile, many research papers on the advantages and possible barriers of CBDC are being commissioned by the central bank.
Powell is partly responsible for the setting up of US monetary policy, and supervises the Federal Open Market Committee for the Central Bank. Earlier this month, while it indicated that the pandemic-induced bond buying programme might soon be slowing down, the Board opted to leave its current stimulus measures intact. The warning seems to have placed some reduction of risk capital, including inventories and cryptocurrency.
