No Restrictions on Cryptocurrency Swap

EghtesadOnline: Cryptocurrency regulations approved by the Tehran government in 2019 do not prohibit the swapping of cryptocurrencies, the Vice Presidency for Legal Affairs said in response to an inquiry by the ICT Guild.

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03 August 2021

In a letter sent in response to the guild's earlier request for clarification on crypto rules, the Vice Presidency for Legal Affairs noted that the law states that digital currency cannot be used for payment inside the country.

"Rules are in accord with the country's monetary and banking law," the letter said. "Converting one cryptocurrency into another digital currency is not illegal."

It went on to say that “banks and licensed moneychangers can use cryptocurrency mined by authorized miners in Iran to pay for imports."

Mining virtual currency is legal in Iran and miners can operate under rules approved by the government in July 2019. As per law, miners of cryptocurrencies are recognized as owners of the digital asset.

In March and following stringent anti-money laundering measures, the CBI ordered Shaparak, the local payment settlement network, to block online payment gateways owned by crypto exchange websites.

Later, media outlets published a letter from Mahmoud Vaezi, President Hassan Rouhani’s chief of staff, in which the CBI was asked to stop blocking the crypto exchanges. The measure was in response to a petition signed by more than 60,000 people involved in the crypto business.

The petition sent to Rouhani referred to the government's crypto regulations in which use of digital currency for purchasing goods and services is prohibited even though its trade is not illegal so long as traders are accountable for any potential risks.

Signatories of the petition called for forming a working group in which government authorities, private sector representatives and market players discuss the issue in depth and offer solutions “in the national interest”.

Crypto Studies

The sharp increase in cryptocurrency investment in recent months and wild fluctuations in its price prompted officials to announce measures to help protect investors' assets and contain the likely consequences of decline in cryptocurrency value.

A study conducted by the High Council of Cyberspace shows total bitcoin trade in Tehran alone is approximately 30-40 trillion rials ($130-174 million). Another recent study by the Tehran Chamber of Commerce, Industries and Mining, shows 12 million Iranians have invested in digital currencies.

Earlier in May, the Majlis in a letter to financial authorities asked them to exercise extra caution in dealing with the controversial issue.

Lawmakers said imposing a ban on crypto trade in and of itself is not enough and the central bank should develop precise regulations vis-à-vis the function of crypto exchanges and block their access to payment gateways until rules are finalized.

Later, the CBI said it was in no hurry to announce new procedures for cryptocurrency exchanges. It said it was preparing a roadmap for managing the crypto market in collaboration with state institutions, including the High Council of Cyberspace.

The council, however, says the central bank should develop regulations for cryptocurrency exchanges without publicizing anachronistic concerns about the interest of investors and voicing concern about fluctuations in the value of digital assets.