Tehran’s Bitcoin Trade Is Estimated at $174m a Day

"The central bank should develop regulations for cryptocurrency exchanges. They are worried about a decline in the prices of the digital currency and investors’ reaction" Eghtesadnews quoted Abolhassan Firouzabadi as saying.

He criticized the regulator’s hesitation and procrastination in regulating crypto exchanges. “Worrying about the public reaction cannot be an excuse for not supporting the public."

Earlier on Tuesday, CBI Governor Abdolnasser Hemmati said it is no hurry to announce new procedures for the cryptocurrency exchanges.

He said the CBI is planning to announce a roadmap for managing the crypto market in collaboration with state institutions, including the High Council of Cyberspace. He strongly recommended investors not to risk their money by putting it into unauthorized markets.

Hemmati and Firouzabadi are candidates in the presidential elections set for June 18.

Hemmati's comments came in response to letter from the Majlis in which the CBI was asked to develop precise regulations vis-à-vis the function of crypto exchanges and block their access to payment gateways until rules are finalized.

In recent months Iranians in increasing numbers have been putting money in bitcoins and other digital currencies as parallel markets, such as forex, gold and shares, lose luster.

A recent study, conducted by the Tehran Chamber of Commerce, Industries and Mining, shows that an estimate of 12 million Iranians have invested in cryptocurrencies.

This has prompted authorities to find a solution to help prevent investors' potential losses. The issue of cryptocurrencies, however, is more complicated than previous regulatory challenges. As a result, no state body seems to be keen on shouldering the responsibility.

The Iran Fintech Association, representing crypto exchanges' interest, has warned policymakers about the negative impact of restrictive measures for crypto business.

"Resorting to restrictive measures is the simplest, but not the best, response to the issue [of cryptocurrencies]. Doing so would deprive the nation of potential opportunities and create grounds for underground business."

Mining virtual currency is legal in Iran and miners are allowed to operate under rules approved by the government in July 2019.

So far 24 cryptomining centers and farms using 310 MW have permits from the Ministry of Industries. The government sells electricity to legal miners at tariffs much higher than the subsidized rates to regular subscribers, which has exacerbated illegal mining.

However, trade in crypto is banned even though recently the central bank said banks and licensed moneychangers can use the digital currency mined by authorized miners in Iran to pay for imports.

Earlier in March, in line with the government’s anti-money laundering measures the central bank ordered Shaparak, the local payment settlement network, to block online payment gateways owned by crypto exchange websites.  

Market players believe that the move was not legal, as "there are no regulations per se barring the work of crypto exchange.”

Government regulations only ban using cryptocurrencies for purchasing goods and services. It is clear that trading cryptos is not illegal though traders are accountable for the ensuing risks.