Iran’s Central Bank Bans Cryptocurrencies, Sparks Debate Among Experts
Background
The Central Bank of Iran has banned the use of cryptocurrencies by financial institutions in the country, a move that has sparked debate among experts and individuals who viewed virtual currencies as a means to overcome problems related to the banking industry and international sanctions.
The Ban
According to sources, the ban was announced despite earlier reports that the bank’s Information Technology Chief, Nasser Hakimi, had reported that the Central Bank was considering the adoption of a national virtual currency. The idea was to create a digital currency that could potentially replace the US dollar, which is currently barred from use due to international sanctions.
Expert Opinions
Some experts believe that cryptocurrencies like bitcoin will eventually replace traditional systems. Masoud Khatouni, deputy for information technology and communications network at Bank Melli Iran (BMI), has stated that cryptocurrencies are “currently shaping the future of banking” and should be recognized and widely accepted in the banking system.
Khatouni also opposes imposing any limitations on the use of digital currencies, arguing that delaying their formal introduction will result in damage to the country’s banking system. He believes that devising “comprehensive, precise and transparent rules and regulations for the use of digital currencies” is essential to prevent individuals from engaging in secret transactions.
Regulatory Framework
The secretary of Iran’s High Council of Cyberspace has also welcomed the idea of bitcoin and other cryptocurrencies if they are harnessed by clearly-stated regulations. The head of the Iranian Association of Moneychangers has recommended that cryptocurrencies be met with regulatory frameworks, stating that a lack of regulations will eventually lead to fraud.
Impact
The ban on cryptocurrencies by the Central Bank has sparked concerns among individuals and businesses who were using digital currencies as a means to bypass international sanctions. The move is seen as a blow to Iran’s efforts to develop its own virtual currency and integrate cryptocurrencies into its financial system.
Key Takeaways
- The Central Bank of Iran has banned the use of cryptocurrencies by financial institutions in the country.
- Experts are divided on the issue, with some believing that cryptocurrencies will eventually replace traditional systems while others argue that a regulatory framework is necessary to prevent fraud.
- The ban has sparked concerns among individuals and businesses who were using digital currencies as a means to bypass international sanctions.
Sources
- Financial Tribune, “No Bitcoin Trade for Moneychangers” (Dec. 23, 2017)
- Central Bank of the Islamic Republic of Iran, “Laws & Regulations”
- Various news sources