General

Iran to seize all Crypto operations, may depend on State Owned Crypto

The Central Bank of Iran has advised all banks to avoid dealings in any crypto related activity. It means that every mining and exchange activity operating in the country is doomed.

In contradiction to this announcement, Abolhassan Firouzabadi, secretary of Iran’s High Council of Cyberspace (ICC), said, “We [at the HCC] welcome Bitcoin, but we must have regulations for Bitcoin and any other digital currency…Our view regarding Bitcoin is positive, but it does not mean that we will not require regulations in this regard because following the rules is a must.”

The Central bank of Iran launched a statement in response, “The wild fluctuations of the digital currencies along with competitive business activities underway via network marketing and pyramid scheme have made the market of these currencies highly unreliable and risky.”

The premier banking institution now declares that any bank, credit institution and currency exchange is prohibited from conducting any sale or purchase of digital currencies. It also disallows them to engage in any activity that promotes the usage of cryptocurrencies.

It further said, “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.”

According to some experts, Iran is following the steps taken by China to crack down the existing crypto market in order to raise demand for an upcoming nationally mandated cryptocurrency. In February, Mohammad-Javad Azari Jahromi, Minister of Iran’s Information and Communications Technology (ICT), Twitted

“In a meeting with the board of directors of the Post Bank of Iran on digital currency based Won blockchain, the necessary measures for the pilot implementation of the country’s first digital currency were set out by using the country’s elite capacity. A pilot model for review and approval will be presented to the banking system of the country.”

As per news reports, the national currency of Iran is facing troubles after the US launched sanctions on the country. It further pressurized other countries to comply with its orders that limited trade and lowered the value of the rial. It is hit an all-time low due to US actions. It is speculated that the sanctions will be renewed in May which will cause further dame to the economy of the country.

It is believed that prevailing financial crises is the main reason for Irani government to ban all crypto related activities. On the other hand, some critics believe that sensible use of digital currencies can elevate the country from ongoing instability.

Popular services like Mastercard and PayPal are banned in Iran which made virtual currency an appealing exception for forward-looking investors. But, cryptocurrencies were never able to fully exploit their potential as the Irani authorities were never determined to make their use commonplace.

The crypto supporters do have some hope with the launch of the government-backed cryptocurrency. It can be a solution to all the fiscal problems the country has faced recently. Iran can take note from the Venezuelan Petro token which has been launched to combat similar situation and trade pressures in Venezuela.

Article written by Brian Crain

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Brian is a contributor here at TokenTurf. Brian was previously in charge of Business Development at the enterprise blockchain company Monax. He has degrees in economics, philosophy and cognitive science from The University of Chicago, London School of Economics and University College London.