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Man Giving Presentation to Iran Blockchain Community

Iran Blockchain Community Welcomes Central Bank’s Stance on Cryptocurrencies

Reading Time: 2 minutes by on February 5, 2019 Altcoins, Blockchain, Business, Commentary, Finance, News, Regulation
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The Iran Blockchain Community, a local NGO dedicated to developing blockchain technology in the country, welcomed the Central Bank’s draft policy on cryptocurrencies as it could help citizens bypass the sanctions imposed by the U.S., the Financial Tribune reported on February 2, 2019.

CBI Unveils Draft Policy on Cryptocurrencies

Back in April 2018 when volatility in the forex market started stirring up, the Central Bank of Iran banned foreign currency trade. The bank’s answer to the state of the market was issuing a directive that claimed that financial institutions regulated by the central bank cannot trade in bitcoin. According to the directive, trading in cryptocurrencies would be tantamount to money laundering.

After the directive, bitcoin exchanges were being singled out and many of their websites blocked until the Iran Blockchain Community stepped in. The NGO focused on furthering the development of blockchain technology in the country and applied some heavy lobbying to the relevant authorities until the ban was lifted.

In September 2018, Abolhassan Firouzabadi, secretary of  High Council of Cyberspace, announced that crypto would henceforth be accepted as an industry. Sepehr Mohammadi, president of the board of directors of the Iran Blockchain Community told the Financial Tribune that the new policies on cryptocurrencies were a positive development for the country.

The policy, however, still upholds the central bank’s ban on common cryptocurrencies such as bitcoin to be used as payment tools within Iran.

Bypassing Sanctions and Attracting Foreign Investment

According to Mohammadi, the central bank should “show more flexibility” in its approach to the bitcoin ban if it wants to attract foreign investment to the country. He also pointed out that launching a state-backed cryptocurrency would be a viable way of bypassing sanctions.

“The fact that the US has proceeded to sanction Iran’s national cryptocurrency before it is launched means that the tool has the capacity to bypass sanctions,” he said.

Soheil Nikzad a member of the board of directors of the Iran Blockchain Community, told the Financial Tribune that an average of $10 million worth of bitcoin transactions take place every day in Iran, despite the ban. Mohammadi added that cryptocurrencies could be used for the greater good if the private sector was allowed to develop its own cryptocurrencies.

Mohammad Javad Azari Jahromi, Iran’s Telecommunications Minister, said that the country already has in place five models for its national currency, but didn’t comment on the possibility of allowing them in the private sector.

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