Iran To Regulate Not Restrict Crypto, Says Finance Minister

Iran’s Minister of Economic Affairs and Finance, Abdolnaser Hemmati, has revealed the government’s plans to regulate cryptocurrencies instead of imposing outright restrictions.

Speaking at a national event, Hemmati emphasized leveraging digital assets to mitigate economic challenges, including U.S. sanctions, and creating opportunities for youth employment.

He noted that cryptocurrencies fall under the jurisdiction of the Central Bank of Iran (CBI), which is actively developing a regulatory framework.

Iran’s Vision for Crypto Regulation

According to local reports, Hemmati highlighted the government’s goal of eliminating the negative impacts of cryptocurrencies on the economy while maximizing their potential benefits.

BREAKING: 🇮🇷 Iran to embrace #Bitcoin and crypto with regulatory framework instead of banning them, says Minister of Economic Affairs

First Russia, then China…now Iran.

bRICs are coming… 🚀 pic.twitter.com/vGBw7JgLZj

— Bitcoin Archive (@BTC_Archive) December 9, 2024

The CBI recently unveiled the Policy and Regulatory Framework for Cryptocurrencies, which mandates licensing for crypto brokers and custodians.

The framework prioritizes compliance with anti-money laundering (AML) laws, counter-terrorism financing (CTF) measures, and local tax regulations.

CBI Governor Mohammadreza Farzin underscored the importance of collaboration between the CBI and the Ministry of Economic Affairs to create robust policies for the digital asset ecosystem.

Farzin echoed Hemmati’s sentiments, citing cryptocurrencies as tools to boost national assets, align with global economic practices, and evade sanctions.

Economist Mohammad Sadegh Alhosseini estimates that Iranian investors currently hold $30 billion to $50 billion in cryptocurrency. This is comparable to one-third of the nation’s gold market.

This underscores the growing importance of digital assets in Iran’s economy.

Iran CBDC Plans Amid Regional and Global Implications

Beyond cryptocurrencies, Iran has made strides in developing central bank digital currency (CBDC). A report shows that 134 countries are exploring digital currency.

The digital rial, which has been in development since 2018, is part of Iran’s efforts to modernize its financial systems.

The digital currency utilizes open-source Hyperledger Fabric technology and has undergone extensive research and testing. This includes a retail CBDC pilot launched on the island of Kish, a free trade zone. The pilot aims to evaluate the currency’s domestic use and scalability for future implementation.

In June, CBI Governor Farzin remarked that the CBDC initiative is critical to Iran’s plan to maintain modern banking practices while addressing domestic economic challenges.

The Central Bank of Iran (CBI) plans to introduce its digital currency, the Digital Rial, as part of a broader initiative to modernize the country’s banking infrastructure and enhance international financial collaboration.
Mohammadreza Farzin, the governor of the CBI, broke in… https://t.co/B2Fr3Q2Ft1 pic.twitter.com/KJCKSAPX84

— Iran Daily (@IranDailyWeb) November 26, 2024

Iran’s move to regulate cryptocurrencies aligns with a broader global trend of nations exploring digital assets to circumvent sanctions.

For example, Russia, another nation heavily sanctioned by the U.S., legalized cryptocurrency use for international trade in 2024.

This strategy marks a notable shift in how governments under economic constraints leverage blockchain technology to bolster their financial systems.

During the 2020-21 cryptocurrency bull market, Iran had already shown interest in the sector by attempting to regulate Bitcoin mining. Despite occasional crackdowns on unauthorised mining operations, these efforts generated significant revenue for the nation.