Iran’s Apex Bank Announces Crypto Ban

The Central Bank of Iran (CBI) has banned banks and other financial institutions in the country from using cryptocurrencies. The reason for the ban is that cryptocurrencies are open doors for money laundering and terrorism risks.

The statement was issued last Monday, amid the ongoing debate on how to best regulate the crypto technology. The crypto community in Iran believes that the ban will have no effect on them as some exchanges continue to operate normally.

According to the CBI, “the government’s money laundering committee had taken the decision in late December and it was now being put into effect,” the central bank was also quoted by the news outlet in this manner: “All cryptocurrencies have the capacity to be turned into a means for money laundering and financing terrorism and in general can be turned into a means for transferring criminals’ money.”

Mehr news reported that the central bank had notified banks and financial institutions in Iran a few days ago.

This ban came at a very delicate period for Iran’s economy. New economic sanctions are to be adopted on Tehran, and the decision has to be taken latest on May 12, both by the EU and the US. This might lead to a restoration of the harsh international controls on Iran; controls that were lifted in 2015 after the signing of a nuclear treaty between Iran and six other countries including the US.

The decision of the central bank to ban cryptocurrencies does not seem to be based on a unanimous decision of the whole Iranian government. Iran’s Telecoms Minister had tweeted in February that his ministry and the CBI were investigating the prospect of running a joint initial coin offering (ICO).

The minister had then said that a cryptocurrency will serve as an experimental model for the country’s banking system.

The latest directive from the CBI is seen as an about –turn and is also indicative of disagreements among the highest ranks of Iran’s ruling elite.