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Iran Central Bank Prohibits Country’s Banks From Working With Crypto Companies

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The Islamic Republic News Agency (IRNA) reported that the Central Bank of Iran (CBI) has banned Bitcoin and other cryptocurrencies in the country. CBI claimed that the anonymous nature of virtual currencies can be used for money laundering cases and other terrorist and criminal activities. Additionally, Bitcoin is decentralized which means that it follows no rules and regulations and is not controlled by any bank.

According to Reuters, IRNA said, “Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them.” The Business Times wrote that the Iranian Rial hit an all-time low due to the country’s crippled economy. The Rial is currently valued at $42,004, increasing from a staggering $57,000 earlier in April. Hence, the recent announcement could be linked to the falling price of Iran’s fiat-currency.

Last year, Amir Hossein Davaee, Iran’s Minister of Information and Communication Technology (ICT), said that the country was looking at different ways to adopt Bitcoin. Davaee claimed that they had “already conducted a number of research studies as part of efforts to prepare the infrastructure to use Bitcoin inside the country.”

Similar to Venezuela’s Petro, Iran also planned on developing its own cryptocurrency. Minister of Iran’s Ministry of Information and Communications Technology, Mohammad-Javad Azari Jahromi, tweeted, “In a meeting with the board of directors of Post Bank on digital currencies based on the blockchain, I … prescribed … measures to implement the country’s first cloud-based digital currency.”

Despite these events, CBI stated this year that it would never recognize Bitcoin as a currency, “The wild fluctuations of the digital currencies along with competitive business activities underway via network marketing and pyramid scheme [tactics] have made the market of these currencies highly unreliable and risky.” However, the current ban neither provides details on the illegal status of Bitcoin nor the consequences of breaking the law.

Image Credit: Deposit Photos

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