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The Central Bank of Iran has issued a warning to prohibit unlimited crypto transactions and remind investors that in limited circumstances, only cryptocurrencies minted by licensed miners of the Islamic Republic can be used. The bank warned that traders will take full responsibility for the risk, although it is still legal to conduct encrypted transactions on imported goods through approved banks and exchanges.
The Fars News Agency pointed out in a report that with the increase in the price of decentralized assets in recent months, the popularity of cryptocurrencies among Iranians has grown significantly. Crypto trading platforms have taken advantage of the turbulent situation in the Iranian stock market, and since last summer, the country’s trading volume has dropped significantly. ILNA, a member of the senior board of the stock exchange, quoted Mohsen Alizadeh as saying:
The outflow of funds is traceable. Liquidity has flowed into parallel markets including digital currencies.
According to his data, 1,500 trillion rials ($7 billion) of capital have left the Iranian stock market through major shareholders and institutional traders. “Financial Tribune” reported that the main index of the Tehran Stock Exchange, TEDPIX, has fallen by 50% in the past few months. In this context, the Central Bank of Iran now advises Iranians to avoid trading cryptocurrencies, warning them that crypto investments will be at their own risk.
The CBI effectively prohibits the use of foreign-mined cryptocurrencies. In a statement issued this week, the financial institution reminded the Iranian public government of an earlier decision, according to which only cryptocurrencies mined in Iran and complying with the law can be transferred. Fars cited the details of the announcement as saying: “Authorized money changers and banks can settle foreign exchange payments for imports through the cryptocurrency mined in the country.”
In April, the CBI allowed the use of diversified funds in cross-border payments to foreign suppliers in accordance with its guidelines. The cryptocurrency used for import must be provided by crypto miners operating in Iran. The agency emphasized that mining entities must obtain permission from the Ministry of Industry, Mines and Trade.
A report cited by Bitcoin.com News in April showed that lenders and licensed currency exchange offices have been notified about crypto payment regulations. The Central Bank of Iran has adopted new policies to try to circumvent or at least minimize the impact of US sanctions on Iran’s financial transactions with the rest of the world.
The latest CBI announcement indicates that the same rules apply to cryptocurrency transactions. “The Central Bank of Iran announced that, in accordance with the Cabinet’s decision, it is forbidden to withdraw digital currency for trading abroad, and only currencies withdrawn within the country can be traded,” the Iranian International News Channel’s unedited English translation of the Persian tweet read.
CBI is also considering launching its own central bank digital currency (CBDC). Earlier this year, it revealed that it was reviewing different options for issuing digital rials 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 enforce regulations restricting financial transactions through anonymous accounts.
What do you think of Iran’s warnings on cryptocurrency investment and the warning to prohibit the use of cryptocurrencies mined abroad? Tell us in the comments section below.
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