Iran’s central bank has declared that in Iran cryptocurrency like bitcoin is no longer allowed to be traded or sold, officially banning them in the country. Citing money laundering and terrorist financing the reasons, the ban has been passed in December that came into effect now.
Money laundering & terror funding drives Iran cryptocurrency ban
Iran’s central bank, the Central Bank of the Islamic Republic of Iran issues a notice that bans the use of cryptocurrencies by banks and financial institutions. There has been an ongoing debate over the best way to regulate the crypto sector.
In a statement released by the central bank, it has been explained that:
“The use of Bitcoin and other cryptocurrencies in all the country’s monetary and financial centres was banned.”
It has been stated that the money laundering committee set up by the government took the decision last December, which has been put into effect now.
The government agency, IRNA quoted a circular by the central bank that was passed by the anti-money laundering body in December:
“Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them.”
Money Laundering and terrorist financing have been the reasons put forth by the government as explained here:
“all cryptocurrencies have the capacity to be turned into a means for money-laundering and financing terrorism and in general can be turned into a means for transferring criminals’ money.”
Disciplinary actions to be taken on failure to compliance
In Iran Cryptocurrency have been seen as something with a great potential by many Iranians that can help in overcoming the problems associated with the country’s banks and international sanctions.
Before the release of this directive, the central bank only warned the people of the potential risks associated with the cryptocurrencies. Now, with this ban, the money exchanges are refrained from buying or selling the cryptocurrencies or indulge in any kind of activities or measures that either promote or facilitate the digital currencies.
In failure to comply with these regulations, the bank warns the potential violators of facing the disciplinary action based on the set rules and regulations.
Recently, India’s central bank, Reserve Bank of India (RBI) ordered the registered entities to not to provide services to businesses dealing with cryptocurrencies. A petition has been signed against RBI’s stance on cryptocurrencies in the court which has further sent a notice to the central bank among other regulatory bodies.
Iran’s currency rial is down to its all-time low
In the wake of the possible return of dire sanctions, Iran has moved on to unify its exchange rates and banned the money changing outside its banks. The move came after the country’s concern on its official currency, Rial plunged to the rock bottom.
Local sources have reported that the country will now start reporting foreign currency amounts in euros instead of US dollars. Given the political tension between both the countries, ditching the dollar move has been taken after Trump’s decision to ban Iran from entering the US which is going to make the feud worse.
The threat of oncoming US sanctions has destabilized the foreign exchange market of Iran. Now, Trump will be making the decision if the US economic sanctions on Tehran would be restored or not on May 12.
Do you think the Iran cryptocurrency ban will further worsen the financial condition of the country?