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As many countries around the world seek to make digital currency regulations that are easy to understand and adhere to, Iran seems to be moving in the opposite direction. The Middle Eastern country has proposed a raft of measures that have left the budding digital currency industry in more confusion than ever before.

Iran’s parliament published the proposed laws this week, a report by local outlet ArzDigital revealed. They seek to bring digital currency under the existing currency smuggling and foreign exchange regulations.

The outlet further revealed that the new laws will require all digital currency exchanges to obtain a license from the country’s central bank. They will also have to stick to tough guidelines put in place for the fiat currency exchanges.

The laws will put digital currency traders at risk of prison sentences or severe fines if found guilty of breaking them while in Iran. Those outside Iran will be faced with international sanctions.

The move is meant to curb foreign outflows, the government claims. They will also help the government combat the increasing decentralization of financial activities as more Iranians have turned to digital currencies in the tough economic times.

If passed, the laws will pose the danger of shutdown for digital currency exchanges. While it requires them to be licensed, it hasn’t laid down the due process or the requirements. It has also failed to account for foreign digital currency exchanges which control the largest stake in the market. Such exchanges, led by P2P platform LocalBitcoins, are based in Europe and other Asian countries.

Iran has had a love-hate relationship with digital currencies, seeming to only allow their use in as far as it could still control the market. For several months now, it has been suspected that the oil-rich country has been using digital currencies to evade sanctions imposed by the Trump administration.

Some of Iran’s leaders have been on record urging Iranians to turn to digital currencies to beat the sanctions. Two months ago, a commander of the Islamic Revolutionary Guard Corp told a crowd, “To circumvent sanctions, we must develop solutions such as the exchange of products and the use of cryptocurrencies with our partnerships in other countries.”

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