Iran Warns Crypto Investors Amid Ban on Bitcoin Mined Outside Its Borders
The Central Bank of Iran has issued a warning against unrestrained crypto trading and reminded investors that only cryptocurrencies minted by licensed miners in the Islamic Republic can be used under limited circumstances. Traders will bear full responsibility for the risks, the bank cautioned, although spending crypto on imports through approved banks and exchanges remains legal.
Central Bank of Iran Speaks Against Crypto Investments Despite Plunging Stock Market
The popularity of cryptocurrencies among Iranians has grown significantly with the rising prices of the decentralized assets in recent months, Fars News Agency noted in a report. Crypto trading platforms have taken advantage of the volatile state of the Iranian stock market, where deals have seen a remarkable decline since last summer. Quoted by ILNA, a member of the High Council of Securities and Exchange which governs the stock market, Mohsen Alizadeh, noted:
The capital outflow is traceable. Liquidity has flown into parallel markets, including digital currency.
According to his figures, 1,500 trillion rials of capital, or $7 billion, has left the Iranian stock market through major shareholders and institutional traders. The Financial Tribune reported that the main index of the Tehran Stock Exchange, TEDPIX, has dropped 50% in the past few months. On this backdrop, the Central Bank of Iran has now recommended that Iranians avoid dealing in cryptocurrency, warning them that crypto investments would be at their own risk.
The CBI has effectively banned the use of foreign-mined cryptocurrencies. In the statement released this week, the financial authority reminded the Iranian public of an earlier government decision, according to which only cryptocurrencies mined in Iran, and in accordance with the law, can be transferred. “Authorized money exchangers and banks can settle forex payments intended for imports through the cryptocurrencies mined inside the country,” detailed the announcement, quoted by Fars.
In April, the CBI permitted the use of decentralized money in cross-border payments to foreign suppliers in accordance with its guidelines. The cryptocurrency spent on imports has to be provided by crypto miners operating in Iran. The mining entities must be licensed by the Ministry of Industry, Mines, and Trade, the institution emphasized.
New Rules and Regulations Apply to Crypto Trading
A report quoted by Bitcoin.com News in April revealed that lenders and licensed currency exchange offices have been notified about the crypto payment regulations. The Central Bank of Iran has adopted the new policy in an attempt to circumvent, or at least minimize the impact of sanctions imposed by the U.S. on Iranian financial transactions with the rest of the world.
The latest CBI announcement suggests that the same rules apply to cryptocurrency trading. “The Central Bank announced that according to the decision of the Cabinet, trading of digital currencies extracted abroad is prohibited and only currencies extracted inside the country can be traded,” reads the unedited English translation of a Farsi tweet by the Iran International news channel.
The CBI is also mulling the launch of its own central bank digital currency (CBDC). Earlier this year, it revealed it’s reviewing different options to issue a digital rial and studying similar projects in countries such as China and the Russian Federation. At the same time, the bank reaffirmed its commitment to implementing laws aimed at curbing money laundering. In January, Governor Abdolnaser Hemmati vowed that the CBI will continue to implement regulations limiting financial transactions through anonymous accounts.
What do you think about Iran’s warning against crypto investments and the ban on the use of cryptocurrency mined abroad? Tell us in the comments section below.