Central Bank of Iran (CBI) has prohibited the country’s financial businesses from investing in Bitcoin and other cryptocurrencies. CBI is one of the leading banks of Iran and its principal market regulators. Although the announcement was made a few days ago, the decision to bar investments in cryptocurrencies was already passed in December 2017 by the anti-money laundering body of the country.
The circular was sent by the CBI expecting an immediate implementation of the regulations because it fears that the cryptocurrencies could be used illicitly for money laundering and to finance terrorism. As per the reports, the supreme committee of the CBI that curbs money laundering and fights capital flight in Iran, has sent a circular to all the banks and financial institutions barring them from making any transactions that can lead to buying, selling or promoting cryptocurrencies.
IRNA, the official news agency of Iran has 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’s Rial Facing Tough Times
Iran is already facing tough times. Its economy is in doldrums and despite all the efforts by the CBI to bring it back from its ailing situation, the Iranian Rial has failed to show any hints of a revival. As a part of the Rial revival process, the government of Iran even made it mandatory for the citizens to exchange their currency against the US dollar for no less than IR 42,000.
Initially, the currency managed to gain a bit against the US dollar, however, over the past few days it is losing its ground. And the same pattern has been witnessed with other currencies including the Swiss Franc, British Pound, and Euro that are now doing much better than Rial at a higher value. It would seem that the restrictions did not do well at all for the economy of Iran.
Despite putting restrictions on the rates of currencies for exchanging Rial, Iran has not been able to take grip of its deteriorating economic condition. Further, if U.S. President Donald Trump restores the economic sanctions on Iran on May 12, it can immediately put the 2015 pact between Iran and six major powers in danger thereby making it difficult for Tehran to cope up with the crisis.
It is doubtful whether these new restrictive measures by the CBI to ban domestic cryptocurrency activities can deliver the expected results as there is already major support on the other side.
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