Iran Bans Cryptocurrency for Fear of US Sanctions

Iranian financial institutions are prohibited from buying, selling or promoting cryptocurrencies

Marcus Zallman
Read +
Follow Us

The official Islamic Republic News Agency (IRNA) has said that Iran’s central bank has banned the use of cryptocurrencies after the government decided to put in place measures to combat money-laundering.

Citing the Central Bank’s statement, IRNA has reported that “All branches of banks, credit institutions and currency exchanges should stay clear of any sale or purchase of these currencies and avoid undertakings that facilitate or promote such currencies. Action will be taken against those who contravene the regulations.”

The release further explained that "all cryptocurrencies have the capacity to be turned into a means for money-laundering and financing terrorism and in general can be turned into a means for transferring criminals' money.”

While many central banks throughout the world have taken similar steps against digital currencies, a complete ban is uncommon.

This comes in the wake of reforms designed to stabilise Iran’s currency, the rial, and by banning cryptocurrency trading, Iran is most likely attempting to block anxious traders from turning away from the rial in favour of bitcoin and other cryptocurrencies.

Iran has been in a financial crisis due the free fall of its natural currency which breached 60,000 to the US Dollar. This has been speculated of Iranian’s fears that the US may withdraw from its multiparty nuclear deal next month, which could mean that Iran could be subject to fresh sanctions.

Donald Trump has a deadline of 12 May to decide whether or not to re-impose US economic sanctions on Tehran.