Friday, March 21, 2025
Iranian authorities have resumed cracking down on cryptocurrencies and online exchanges as the value of the national currency plummets. The Central Bank of Iran (CBI) appears to believe one reason the rial is losing value rapidly is because many Iranians are using their rials to buy cryptocurrencies.
In January, the Central Bank suddenly stopped rial payments in all cryptocurrency exchanges, leaving more than 10 million crypto users unable to spend rials on Bitcoin and other global online currencies. After imposing the block, the Central Bank largely turned silent, not offering clarifications to the public.
The new restrictions appear to be part of strict measures to prevent currency depreciation, coming as the CBI pumps more foreign currency into the volatile local market and police periodically announce the arrest of illegal currency traders in the streets of Tehran and other major cities.
Days after its sudden decision to ban rial purchases of crypto-currencies, the CBI imposed conditions on online ex[1]changes and started negotiations with them. Many smaller exchanges were forced to accept at least some of the conditions, including providing proof of reserves.
Some have had their rial gateways restored at limited capacities, while others are still negotiating. Some of the “proposed measures” by CBI comprised top levels of access to customer information, including real-time access, constant updates, and an ability to block users whenever deemed necessary, according to documents reviewed by Al Jazeera. Similar to the artificial limits regulators have set for trading on Iran’s stock markets, CBI envisions imposing daily caps on how much the rial-price of cryptocurrencies can change. If the currencies move beyond defined limits, their rial trade would be suspended.
The central bank is especially eyeing the dollar-pegged stablecoin Tether, which many Iranians have been buying as a hedge. It wants to ensure that if Tether prices surge by more than 4 percent in a day, Iranian traders would be temporarily blocked from buying it. As a result of the abrupt block of rial gateways, some crypto exchanges were forced to start looking for temporary alter-natives, such as using different bank accounts to facilitate rial payments.
Ubitex CEO Eisa Keshavarz told Al Jazeera the establishment is, on the one hand, blocking foreign services like social media platforms to force Iranians toward local platforms, while, on the other hand, it pushes people toward foreign exchanges with its restrictive moves against local counterparts.
“These double policies show that rationality, clear thinking and empathizing with the people are not on the agenda, which widens the gap between the people and the government.” Keshavarz said people would turn to unofficial, underground activities as a result of the restrictions. “I believe it is the people’s inalienable right anywhere to turn their hard-earned money into gold, greenbacks, crypto, housing or anything to preserve their purchasing power,” he said.
The government made crypto mining – the process of generating new coins using computational power – legal in 2019 under strict conditions. But many miners have been driven out because crypto mining consumes vast quantities of electricity, which Iran does not have now.
