An Iranian trader counts money in Tehran's Grand Bazaar. Photo: Reuters/Raheb Homavandi
An Iranian trader counts money in Tehran's Grand Bazaar. Photo: Reuters/Raheb Homavandi

Iran’s central bank has banned the country’s banks from dealing in crypto-currencies because of money-laundering concerns, the state news agency IRNA reported on Sunday.

The news comes, however, as Iran’s currency hit an all-time low. Since September 2017 the rial has weakened against the US dollar by more than 60% as the United States Treasury continues to levy strict economic sanctions against Iranian entities and the country is now witnessing a black market dollar-buying rush.

Last year the rial sat at more than 60,000 to the dollar, but its slide continues as the government, in an attempt to protect the currency, set an official exchange rate of 42,000 rial in April and also capped the amount of foreign currency citizens can hold outside banks. The value of the Iranian rial is tightly controlled by the central bank and reportedly police now patrol exchange shops to try to stamp out widespread illegal trading.

The crypto ban by the Central Bank of Iran applies to “all monetary and financial centers of the country,” and came after the CBI said virtual currencies were possibly being used for “money laundering, supporting terrorism and exchange of sums between wrongdoers.”

President Hassan Rohani was elected to a second term in 2017 on a platform that promised to boost jobs and improve Iran’s depressed economy, but little progress has been seen and in January anti-government protests swept across Iran. In the government crackdown that followed, more than 25 people were reported killed and hundreds more arrested.

To date, there has been no clear regulations in Iran regarding bitcoin and other crypto-currency trading, while crypto media have repeatedly reported that trading volumes are significant in the country, with international bitcoin dealers supplying services there for a number of years that reportedly help circumvent Iran’s restrictive foreign exchange trading environment.

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