Iran Crypto Community Call for Rational Rules

EghtesadOnline: A group of Iranian cryptocurrency activists and business owners have called on the Central Bank of Iran to refrain from taking hasty measures for regulating blockchain technology and cryptocurrencies.

News ID: ۷۴۶۸۹۹

11 March 2019

"The notion of cryptocurrencies and their functionality are complex…therefore, more time and expertise is needed for development of a comprehensive set of rules addressing concerns of both the authorities and the market," says a letter sent to the CBI governor Abdolnasser Hemmati on Friday and shared with the Financial Tribune.

In the  letter, the cummunity called on the Money and Credit Council meeting to finalize the CBI's draft policy to be postponed for four months, expressing their readiness to work closely with the authorities towards creation of an efficient rulebook.

The letter contains an in-depth review of CBI's draft policy of cryptocurrencies, highlighting misunderstandings about the functions of cryptocurrencies, legal deficiencies and its negative impact on the startups.

Back in January, the central bank published a draft of its cryptocurrency policy saying that it cannot give guarantees about the authenticity of cryptocurrencies and would not create a mechanism for controlling and managing the stability of their prices.

The CBI called on experts and stakeholders in virtual currencies to send their views.

It added that the risk for all cryptocurrencies will be for investors themselves and licenses will be issued for these exchanges after their credibility is approved by the bank.

Legal Framework

In some experts' point of view, the regulations should also include a framework for legal activities in cryptocurrencies market.

Hamed Salehi, a blockchain researcher, believes the majority of CBI concerns could be addressed technically "if the central bank allows the ecosystem take an active part in development of regulations."

"Well thought out rules could reduce possible trouble in the future…it's better to develop strong regulations from the outset because revision will not be easy " he told the Financial Tribune, "It could help save online businesses."

In the draft policy document, the CBI said developing crypto wallets for keeping tokens within the legal frameworks would be allowed. Tokens could be backed either by gold or other precious metals, the national currency, foreign currencies or other visible or invisible assets.

The community believes that by taking its current approach, the central bank leaves no room for development of startups.

National Cryptocurrency

As per the document, the CBI is the only entity that can issue a national cryptocurrency. The planned national cryptocurrency can only be traded in certified banks inside the country and be used as a payment tool. The national cryptocurrency cannot be mined.

"Cryptos could be used across the globe... Categorizing the currencies as national or regional is not technically correct…The project could easily fail if built on wrong basis," the letter reads.

The community also criticized the CBI for its centralized approach toward mining and development of a national cryptocurrency. "Developers basically are supposed to develop the project."

"There is no need to work on the project, if it does not allow p2p transactions," the community noted.

What has kept the cummunity optimistic however, is the CBI's welcoming approach towards innovative technologies, especially in recent years.

The CBI last year had a successful experience of working with developers and innovators, when it decided to involve fintechs in the process of developing regulations.