May 26, 2018
But the announcement fell far short of outlawing crypto-currencies.
According to a statement published on CBI’s official website April 22, the decision to ban all monetary and financial institutions from using Bitcoin and other crypto-currencies was taken by the High Council of Anti-Money Laundering December 30. It was not explained why the CBI waited almost four months before announcing the decision. But the delay suggested there were officials disputing the decision.
The CBI statement said, “Since a variety of virtual currencies have the capability of becoming instruments for money laundering and financing terrorism, as well as a means of transferring the money of criminals, the supervisory entity of the Central Bank has notified the ban on employing virtual currencies to banks to prevent the occurrence of any crime.”
Iran has said it will do more to fight money laundering and the use of its banking facilities by terrorists to meet the standards of the Financial Action Task Force (FATF). But FATF has no ban on crypto-currencies.
Prior to the directive, the Central Bank had not prohibited the use of crypto-currencies but had cautioned people that they were highly speculative investments.
CBI Governor Valiollah Seif made his first public comments on Bitcoin December 30, urging Iranian investors to exercise caution while adding that “CBI is striving to bring about relative security to [Bitcoin trading].”
Shortly thereafter, however, Telecoms Minister Mohammad-Javad Azari-Jahromi set up a team to look into creating Iran’s own crypto-currency.
But there are also fears that the technology could undermine the country’s already weak banking system and exacerbate capital flight.
Iranians working in the fledgling private crypt-currency market said the ban was unlikely to affect their operations.
“This ruling referred directly to banks, financial institutions and currency exchangers that work with the Central Bank,” Hadi Nemati, who works for crypto-currency exchange platform Coinex, told Agence France Presse (AFP).
“In my opinion, it doesn’t include the general public — it’s not a total ban on crypto-currencies.”
Coinex had, however, halted activity on its exchange platform because “we always want to make sure we comply with the law”, he said. “But I have seen other crypto exchanges were still working normally.”
About three weeks ago, India’s central bank barred banks from having any links with virtual currency dealers while Pakistan’s central bank said outright that crypto-currencies are not legal in that country.
