Iran To Reverse Crypto Ban Says Draft Regulation

Wilfred Michael 

Wilfred Michael

News reporter

31 January 2019,
11:24
Iran To Reverse Crypto Ban Says Draft Regulation

A January 28 report by Al Jazeera says Iran will likely lift its blanket ban against the use of cryptocurrencies in the country, once its new crypto draft regulation goes into force later this year.

If that eventually happens, then it would become legal for Iranians to hold bitcoin and other cryptocurrencies including the crypto-rial which the country plans to launch this week. Also, crypto-related businesses will have access to services provided by local banks for the first time since April 2018.

Overview Of Iranian Crypto Draft Regulation

  • Recognition for Bitcoin and other global cryptocurrencies including the country’s new national cryptocurrency

  • License to be issued to Initial Coin Offerings (ICOs), crypto wallet operators, crypto exchanges, and miners

  • Using global cryptocurrencies as methods of payment inside the country is prohibited.

  • Iranians cannot hold large amounts of cryptocurrency above 10,000 Euros.

Although no timeline was provided on when the draft will be passed into law, the impending release of Iran’s national cryptocurrency makes it likely that the draft will be implemented sooner rather than later.

Flaws With Iran’s Crypto Draft Regulation

While the new draft bill will bring life to Iranian’s crypto ecosystem, some questions can still be asked regarding how the authorities plan to implement the regulations.

  • The draft proposes a 10,000 Euro threshold, even though it is certain that a bullish market run can instantly take the value of crypto assets held by a trader above that amount. Will citizens be penalized if such a situation occurs?

  • The anonymous nature of cryptocurrencies means that it is not easy for the authorities to track its usage “as methods of payment inside the country.” Although they can enforce AML and KYC compliance from crypto exchanges in the country, some global crypto wallet provider allows users to transact without fulfilling the KYC requirement.

So while the question marks remain, the industry can still bask in the euphoria of having welcome Iran back to business.

India and South Africa are the other countries likely to legalize cryptocurrencies later this year.

 

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