Iran Bans Cryptocurrencies

Central bank raises money laundering and terrorist financing concerns

by Marin Marinov
23 April • 2.5 min
In Regulation

Iran`s central bank (CBI) has officially banned the use of cryptocurrencies over concerns for money laundering and terrorist financing, the Islamic Republic`s state news agency IRNA reported on Monday.

The  ban was adopted by CBI’s Committee for fighting money laundering at the end of the Iranian calendar year (second half of March) but was announced today by the public relations department of bank.

“Virtual currencies have the option to be used for money laundering, supporting terrorism, and exchange of sums between wrongdoers,” CBI said.

The move is seen as part of Tehran`s efforts to control the currency market after the Rial (IRR) hit an all-time low at the beginning of April, the AP news agency reported.

 

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Iran and the cryptocurrencies

Digital currencies have never been authorized in the Islamic Republic. However, cryptocurrencies were available in the so-called parallel markets – unofficial trading places where people can sell or buy banned and authorized by the state products.

“There is no central bank in the world that guarantees Bitcoin. The Central Bank is giving people necessary warnings about buying and selling these currencies and, at the same time, it is trying to establish relative security in this regard,” the CBI governor Valiollah Seif said in January as quoted by the state television Press TV

The Securities and Exchange Organization of Iran (SECI), the supervisory authority of the country`s financial market, has banned brokers from trading in Bitcoins.

 

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Own cryptocurrency?

Iran made news headlines worldwide in February after the Information and Communications Technology minister tweeted that the state-run Post bank was developing own virtual currency. The move was denied by CBI because of the “wild fluctuations” and the “pyramid scheme [that] have made the market of these currencies highly unreliable and risky”.

Earlier this year, the Central bank`s deputy governor for modern technologies Naser Hakimi warned of crypto`s speculation while underlining blockchain and virtual currency growing importance:

“Anyway, blockchain system and cryptocurrencies, like Bitcoins, will eventually be prevalent and replace the current systems,” Hakimi told state-run newspaper Iran Daily.

Last week, the Indian central bank banned trading in cryptocurrencies seeking to protect local consumers from the higher risk.