Cryptocurrencies have caught the fancy of millions of people all across the globe. Some people have made millions by investing in cryptocurrencies while there are also others who have gone bankrupt by dealing with digital assets. Banks and central governments in different countries are still in the process of deciding whether to regulate cryptocurrencies or not. And another pertinent question is that if regulation is required, how to go about it? It has to be kept in mind that cryptocurrencies are based on the blockchain technology – a decentralized ledger. This is the reason why cryptocurrencies cannot be regulated easily.
What happened in Iran?
According to reports, the Central Bank of Iran has prohibited the other banks of the country from offering any service related to cryptocurrencies. They have cited instances of money laundering as the reason behind this decision.
A circular has been issued in this regard by the central bank’s supreme committee that is in charge of curbing money laundering and fighting capital flight in Iran. The circular has banned banks from buying, selling or promoting cryptocurrencies.
The central bank has stated in the circular that cryptocurrencies ‘have the option to be used for money laundering, supporting terrorism and exchange of sums between wrongdoers’.
The circular also said,
“Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them.”
Iran had this month only initiated reforms whereby the official and the open market exchange rates were formally unified to stop the further devaluation of the rial, the fiat currency of the country. From now on, the central bank has notified that an Iranian citizen can hold a maximum amount of only $12,250.
Other measures taken are a ban on money transfers and swaps beyond banks. This happened in the backdrop of the country’s fiat currency being under pressure and losing in value.