Rial Deal? – Iran’s central bank takes step closer to state cryptocurrency

Iran has unveiled new regulations for cryptocurrencies as part of its bid to get around US economic sanctions.

The Central Bank of Iran’s draft document reverses a previous blanket ban, but still keeps a tight rein on the use of digital cash.

The announcement was made just before the launch of the Electronic Banking and Payment Systems conference, which is taking place in the capital, Tehran.

The theme of the two-day event is ‘blockchain revolution’.

The bank also recognised and authorised global and regional cryptocurrencies and ICOs, wallets, and mining.

The proposals ban Iranians from holding large amounts of crypto to protect the value of the fiat rial currency.

“The ban on using internationally accepted cryptos as payment methods can negatively affect the work of me and many like me,” cryptocurrency trader Perhman Azhdarpour told Al Jazeera.

“We were hoping the central bank’s stance would not again restrict the use of Bitcoin and other cryptocurrencies in any way,” he added.

Soheil Nikzad, board member of the Iran Association of Blockchain, told Al Jazeera around $10 million worth of Bitcoin transactions take place in Iran daily.

Sanctions

The move towards a state cryptocurrency is widely interpreted as a way of getting around US economic sanctions.

In May last year, the United States pulled out of a deal to lift sanctions against Iran in return for curbs on its nuclear programme – a deal US President Donald Trump has repeatedly blasted.

Iran controlling a cryptocurrency would allow it to bypass certain measures, such as a ban on buying US dollars.

In November, Iranian banks were barred from SWIFT, the global messaging system that allows cross-border payments.

Tensions have risen since the US withdrew from the 2015 Iran deal.

America’s rivals are exploiting Bitcoin-style cryptocurrencies to get around US sanctions.

Iran, North Korea, Russia, and Venezuela are all investing in the tech in an attempt to counter American economic might.