Flip-flopping Iran finally goes all in on cryptocurrency crackdown

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Is the country shutting down competitors in preparation for their own cryptocurrency?

Iran has been going hot and cold on cryptocurrencies lately. In November last year, the secretary of Iran’s High Council of Cyberspace (ICC) said they “welcome Bitcoin.”

“We [at the HCC] welcome Bitcoin, but we must have regulations for Bitcoin and any other digital currency…Our view regarding Bitcoin is positive, but it does not mean that we will not require regulations in this regard because following the rules is a must,” secretary Abolhassan Firouzabadi said.

But then in February, the Central Bank of Iran backpedalled and released contradictory statements, saying they never legally recognized Bitcoin or any other cryprocurrencies in the territory.“The wild fluctuations of the digital currencies along with competitive business activities underway via network marketing and pyramid scheme have made the market of these currencies highly unreliable and risky,” they stated.

And now, they are going all in on the crackdown. The Central Bank has issued an order banning local banks from engaging in any cryptocurrency-related activities, which means any exchanges operating or planning to operate in the country are good as dead.

“Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them,” the Central Bank reportedly stated in a report by state news agency IRNA. “All cryptocurrencies have the capacity to be turned into a means for money-laundering and financing terrorism and in general can be turned into a means for transferring criminals’ money.”

Some speculate whether they’re trying to pull off something similar to China’s crackdown on cryptocurrencies—phasing competition early in preparation for launching their own nationally mandated cryptocurrency. In February, Iran’s Information and Communications Technology (ICT) minister Mohammad-Javad Azari Jahromi Tweeted that they are working on their own cryptocurrency. A rough translation of his Tweet in Arabic goes:

“In a meeting with the board of directors of the Post Bank of Iran on digital currency based Won blockchain, the necessary measures for the pilot implementation of the country’s first digital currency were set out by using the country’s elite capacity. A pilot model for review and approval will be presented to the banking system of the country.”