The Iranian Central Bank set to prohibit unapproved cryptos from being utilized for payments in the country, according to one draft report.
Central Bank to block the use of unapproved cryptocurrencies
According to a translation of the report which was entitled “Obligations and Rules Regarding Cryptocurrencies,” any crypto wallet is going to be utilized just for holding, as well as transferring cryptocurrencies and integrating any kind of services in wallets which use cryptocurrencies is forbidden.
If the plan is approved, the Central Bank is going to effectively seek to block the usage of unapproved cryptos as a means of payment. But, the report also indicated that the Central Bank is not going to restrict anyone directly from the personal holding or transferring small amounts of approved crypto.
It is not really clear which crypto is going to be approved, though a source with knowledge of the process explained that regulators want all Bitcoin transactions in the country to be settled in the Iranian rial.
Just like it stands, the report is in its first draft, and it is still not official policy within Iran, according to some sources. The report is going to be discussed at the time of the Electronic Banking and Payment Systems conference in Tehran which started yesterday, the 29th of January.
Moreover, Iranians could also be barred from holding large amounts of crypto in the same way they are officially restricted from possessing more than 10,000 euros outside of their regulated bank accounts, as the report states.
A move to protect the fiat Iranian rial from competition
A crypto advocate and developer based in Tehran, who spoke to several sources on the condition of anonymity, said that the community in their country is shocked by the developments. This can be worse particularly for businesses which receive Bitcoin from foreign customers since there is actually a little KYC or know-your-customer procedures with foreign customers and now businesses cannot have their Bitcoins directly.
A few local sources contended this has been a move by the effort of the government of Iran to protect the fiat Iranian rial from the competition.
Interestingly, the report states that the tokens pegged to fiat currencies, precious metals, as well as commodities are actually similarly prohibited as the means of payment. With that being said, tokens pegged to the rial of Iran are permitted provided that they are issued by the central bank – a move which Al Jazeera has reported is set to be unveiled at the conference during this week.
Iranian exchanges obligated to seek licenses
According to the statements of the report, the Iranian exchanges are now obligated to ask for licenses, even though the document itself is offering just a little clarity on when that process is going to start or also how exchanges may go about doing so. Moreover, the report indicated that the central bank is going to create, as well as update a list every three months for cryptos which are permitted to be traded on exchanges.
Right now, the exchanges of Iran collect KYC information, like addresses, as well as government-issued IDs, but they otherwise also operate more like independent sellers than their corporate counterparts abroad.
One anonymous blockchain entrepreneur in Iran explained that getting an exchange license was not an easy task at all, arguing that these regulations could also cripple the nascent industry.
He also explained that at least the government finally recognizes Bitcoin as an asset and did not entirely outlaw it, as there is still some degree of allowance for people to hold, as well as transfer small amounts of crypto for non-commercial purposes.
Still, one anonymous crypto miner said that the nature of all cryptocurrencies is they are decentralized, and this limit to them eliminates that spirit.