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Iran Government U-turns on Bitcoin, but Proposes National Cryptocurrency

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Iran Government U-turns on Bitcoin, but Proposes National Cryptocurrency

In November 2017, reports indicated that the Iranian government was building infrastructure to embrace Bitcoin, which would aid in bypassing economic sanctions. However, the government has now debunked claims of giving bitcoin a legal status as reported on Iran Front Page, an independent news aggregation website.

Iran’s Central Bank exploring crypto regulation

To entirely deny claims of legalizing the pioneer digital currency, the Central Bank of the Islamic Republic of Iran, stated:

“The wild fluctuations of the digital currencies along with competitive business activities underway via network marketing and pyramid scheme [tactics] have made the market of these currencies highly unreliable and risky.”

From this, it seems the Iranian government is on the reverse course from its initial plan to accept bitcoin. Additionally, Iran’s Central bank is exploring ways to “control and prevent digital currencies in Iran.”

However, this does not mean that crypto trading and ICOs are illegal in the country. What is known, regardless of the above claims, is that the country’s government is still hyped about digital currencies and is working on a state-sponsored digital currency.

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Iran follows Venezuela Road to Bypass Financial Blockade

Mohammad Azari Jahromi, Iran’s Minister of Information and Communications Technology (ICT), publicly revealed the country’s intention to explore blockchain technology. According to the minister, the pilot model will soon be presented to the country’s banking system for approval.

In addition to it, Azari Jahromi pointed out that digital money is gaining popularity globally and Iran needs to launch its cryptocurrency to pace with other countries.

The new state-backed cryptocurrency initiative is a joint effort with Post Bank of Iran (PBI), a state-owned bank. PBI has played an essential role in developing country’s electronic banking infrastructure.

Azari Jahromi tweeted (roughly translated):

“In a meeting with the board of directors of the Post Bank of Iran on digital currency based on the blockchain, the necessary measures for the pilot implementation of the country’s first digital currency were set out using the country’s elite capacity. A pilot model for review and approval will be presented to the banking system of the country.”

Iran is not the only country developing a state-backed digital currency. Iran’s plan to establish blockchain based digital money follows Venezuela’s oil-backed cryptocurrency, the Petro, as the country also seeks to navigate financial impasses.

The South American country is suffering from heavy sanctions from the United States, and cryptocurrency is a way to bypass these sanctions. Although Iran does not face precisely the same blockades as Venezuela, payment services such as Paypal are still banned in the country.

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