Iran to limit crypto exchanges

Parliament proposes amendment to ‘Currency Smuggling’ laws

Iran’s parliament has moved to limit the development and spread of cryptocurrency exchanges within the Islamic republic.

The amendments proposed by the government to the current Currency Smuggling laws would include cryptocurrencies for the first time. This would require crypto exchanges to obtain a licence from the Central Bank of Iran in order to operate, after which they would have to follow the longstanding regulations which currently apply to foreign currency exchanges.

The move will put added pressure on Iran’s budding crypto entrepreneurs. If they fall foul of the new restrictions, they could on the one hand face imprisonment in Iran or, on the other, become targets for American sanctions.

These sanctions have contributed to cripple the already weak Iranian economy. Following years of official resistance, denial and parliamentary wrangling, measures were recently approved that would reconstitute its currency. By removing four zeros from the Rial and relaunching it as the Toman, the Iranian government hopes to reduce the hyperinflation ravaging the economy.

Within this context, the privacy and decentralised nature of cryptocurrencies have proved increasingly popular. Reports emerged recently that some of Iran’s crypto exchanges were charging premiums on transactions of up to 300 per cent, so desperate were everyday Iranians to find a potential store of value free from the government’s grasp.

The Iranian government, therefore, wary of this threat to its authority and the capital outflows facilitated by cryptocurrencies, is moving ever increasingly to limit the activity and growth of Iran’s over-the-counter crypto businesses.

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