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Iran Central Bank Bans Domestic Banks from Cryptocurrency Dealings

Last Updated October 6, 2020 10:38 AM
Samburaj Das
Last Updated October 6, 2020 10:38 AM

Citing money laundering concerns, the Central Bank of Iran (CBI) has banned the country’s banks from offering services to crypto firms or dealing in cryptocurrencies.

The CBI’s supreme committee, also in charge of curbing money laundering and fighting capital flight in Iran, has issued a circular prohibiting banks and financial institutions from transactions that enable buying, selling or promoting cryptocurrencies, the Islamic Republic News Agency (IRNA) reported  Sunday.

In its circular, the CBI further claimed cryptocurrencies ‘have the option to be used for money laundering, supporting terrorism and exchange of sums between wrongdoers’, state-owned IRNA, Iran’s official news agency, revealed.

An excerpt from the circular, as reported by Reuters , read:

Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them.

The cryptocurrency curbs come during wider reforms this month wherein Iran formally unified its official and open market exchange rates in an attempt to halt plummeting Iranian rial, the country’s fiat currency. The central bank has also limited the permissible amount of foreign currency – in cash- to be held by an Iranian citizen to  €10,000 ($12,250).

Measures include a ban on money transfers and swaps beyond banks as the rial hit an all-time low  earlier this month amid fears of a possible return of crippling financial sanctions led by the United States.

Iran underwent a banking blackout after global payments rail SWIFT banned the country’s banks from its network in 2012 in a blockade that lasted four years until a nuclear deal by former US president Obama lifted those sanctions in Tehran in 2016.

On May 12, US President Donald Trump sees a deadline to either sign a presidential waiver on Iranian sanctions or formally withdraw the United States from the Obama-era nuclear accord.

Iran, meanwhile, has been actively exploring the development of its own blockchain-based, state-issued cryptocurrency, following the likes of Venezuela’s own oil-backed ‘Petro’ as a means to circumvent economic sanctions.

Featured image from Shutterstock.