Iran’s Central Bank Bans Institutions from Dealing in Cryptocurrencies

Iran’s central bank has ordered regulated financial institutions to cease dealing in cryptocurrencies or offering services to company’s that facilitate or promote cryptocurrency trading.

According to Reuters, the Central Bank of Iran (CBI) levied the new ban on anti-money laundering (AML) grounds, citing a circular published by government regulator last December.

“Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them,” Iranian state media reported the circular as saying.

“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,” the government added in another section of the circular, which was cited by Radio Free Euorpe/Radio Libertry.

The move comes as Iran is struggling to mitigate a full-blown currency crisis, which was partially spurred by possible forthcoming US economic sanctions.

Regulators had already prohibited money changing outside of banking platforms, and the cryptocurrency ban appears to be another effort to prevent Iranians from siphoning money out of the country.

High-ranking Iranian officials have also called for the government to ban encrypted messaging app Telegram, in part because the firm is launching its own cryptocurrency, called “Gram,” which they claim could lead to as much as $50 billion being funnelled out of Iran annually.

The CBI is not the only central bank to take a hostile stance on cryptocurrencies. The Reserve Bank of India (RBI) recently banned Indian banks from serving cryptocurrency exchanges, though industry groups are currently challenging this ban in the country’s supreme court.

Meanwhile, Iran has also reportedly mulled launching its own state-backed digital currency, which it believes could enable it to evade international economic sanctions, much as Venezuela intends to do with its “petro” cryptocurrency.

Featured Image from Pixabay

David Murray

David has been following the development of cryptocurrency technology for several years, and he is optimistic about its potential to democratize the financial system.

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