New Iranian Central Bank Draft Report Suggests Banning Some Crypto Assets from Payments, Bitcoin Included
A new draft report has come to light from the Central Bank of Iran. The report, titled, “Obligations and Rules Regarding Cryptocurrencies,” outlines new regulations for the use of cryptocurrency, which is surprisingly restrictive. If approved, then consumers in the area may be banned from the use of certain cryptocurrencies when making payments, which may impact Bitcoin as well.
In the translation of the report, the Bank states,
“Any cryptocurrency wallets will be used only for holding and transferring cryptocurrencies and integrating any kind of services in wallets using cryptocurrencies is forbidden.”
The approval of this plan would mean that the bank is blocking the use of any cryptocurrency that is not directly approved. Still, there is nothing to show that the bank will restrict any person individually from holding or transferring small amounts, given that they are using an approved asset.
At this point, there is no information about what cryptocurrencies will be deemed worthy of approval. However, CoinDesk cites an unnamed source as saying that bitcoin transactions within Iran’s jurisdiction will need to be settled with the Iranian rial because it is not approved as a way to make a payment. Furthermore, if imposed, the new ban could restrict crypto in the same way that they have been restricted from holding too many euros, which is set at 10,000.
The report is only a draft, however, and it definitely has not been set in stone yet. On January 29th, the Electronic Banking and Payment Systems conference commences in Tehran, which is where the report is planned to be discussed. An anonymous crypto advocate and developer in the area told CoinDesk that the community believes that “this may be worse specifically for businesses that receive bitcoin from foreign customers since there are little KYC [know-your-customer] procedures with foreign customers and now also businesses can’t have their bitcoins directly.”
Some locals believe that these actions were taken by the local government in an effort to prevent competition (or even victory) against the Iranian rial. Any tokens that are linked with commodities, precious metals, and fiat currency are also explicitly banned in the report. However, if the tokens linked with the rial are issued by the Central Bank, they will be permitted.
Any Iranian exchange, under the draft report, must be licensed to function within the nation, but there is no additional information on how this policy will be implemented or what the requirements are for licensing. However, it does promise to update the list of approved cryptocurrencies each quarter, which will hopefully grow with every new list.
The exchanges that presently exist in Iran are subject to know-your-customer (KYC) protocols, requesting government-issued IDs and addresses from users. However, in a larger sense, they work in much of the same way that independent sellers would, despite the hardships that come with getting an exchange license.
One good change to come out of this is the recognition of bitcoin as an asset in any sense, and that there is not a specific ban quite yet. In the meantime, one anonymous miner pointed out a fact that many countries seem to forget as they establish regulations –
“The nature of cryptocurrencies is they are decentralized. And [this] limit to them eliminates that spirit.”