Iran Central Bank Rebukes Bitcoin, May Develop Own Cryptocurrency

Iran’s central bank quashed news reports that the Middle Eastern country was enabling sales and conducting transactions in bitcoin and other cryptocurrencies. “The wild fluctuations of the digital currencies along with competitive business activities underway via network marketing and pyramid scheme have made the market of these currencies highly unreliable and risky,” the Central Bank of Iran stated in a local newspaper.

The Bank added that it was working with other government agencies to “control and prevent” cryptocurrencies in Iran. Likely this means that the government might soon come out with regulations for bitcoin and other cryptocurrencies. 

In an interview in October 2017, Iran’s Deputy Minister for Information and Communication Technology (ICT) Amir Hossein Davaee stated that the country was preparing infrastructure for using bitcoin and other cryptocurrencies.

“Arrangements are being made with related organizations to put together infrastructure as early as possible,” Davaee said. Yesterday, he said Iran’s Post bank was developing a locally cryptocurrency, which would soon be tested by the ICT ministry.

Iran’s plans to develop a local cryptocurrency come after pre-sale news of Venezuela’s Petro cryptocurrency. Venezuela is using the Petro as a way to circumvent economic sanctions imposed against it by the United States. (See also: Venezuela's Petro 'Cryptocurrency' Is a Farce.) 

Iran itself was placed under economic sanctions in 2012 for its nuclear activities. As part of those sanctions, the country was banned from the SWIFT banking network. President Obama lifted the sanctions in 2016. (See also: Understanding Iran Sanctions By The US.) 

Iran’s actions to regulate cryptocurrencies might boost their ecosystem in the Middle East. According to the 2017 Global Benchmarking Study released by Cambridge University, the region lagged other geographies in adoption and traction for cryptocurrencies. It accounted for the least number of participants (2%) and number of wallets (0%). 

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