February 26, 2021
As many cryptocurrencies hit record highs, the Central Bank of Iran has recommended that the public refrain from investing in any digital currencies—despite the fact that the Bank has been looking into the possibility of issuing its own cryptocurrency.
“People must be aware of the risks associated with putting money into crypto-assets…. Crypto prices are highly volatile and there is simply no oversight body to control the market and investors are likely to incur huge losses,” Mohammad-Reza Mani-Yekta, deputy head of CBI’s office for payment systems, said December 27.
The unprecedented rally in Bitcoin continued after hitting $25,000 on Christmas Day. It topped off at $58,000 in late February and then started falling— as Mani-Yekta had predicted.
In July 2019 the Iranian government said it would recognize cryptocurrency mining as a legal industry. This was first welcomed by miners as a positive gesture. But soon many complained about the high power charges and took their lucrative, but illegal, operations underground to deceive utility companies. They even bribed mosques, which get electricity for free.
The CBI said earlier that activities related to cryptocurren-cies were illegal, banning people and organizations from using them. But there have been stories about official studies of cryptocurrencies with a multitude of plans drafted for the Islamic Republic to issue its own. Venezuela is the sole country to issue its own cryptocurrency thus far, and it has been a flop—which is not a surprise because the attractiveness for many cryptocurrency fans is that they operate outside governments.
Mani-Yekta said regulations need to be amended to include penalties for unauthorized mining and trading cryptocurrencies. He also said, “Studies show that cryptocurrencies had no significant role in Iran’s economy…. They made no contribution to bypassing sanctions.” That was the CBI’s main interest when it studied the issue.
The Financial Tribune reported that the government has closed 1,620 illegal crypto-currency mining operations since it set up rules for legal mining in July 2019. The newspaper said there are only 24 licensed mining operations in the country
