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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