The government is preparing a regulatory framework for trading cryptocurrency and cryptoassets, but no decision has been made to allow trade in digital assets in the capital market, head of the Security and Exchange Organization of Iran said.
"The cryptocurrency market and the stock market in essence are different, especially when it comes to the risk factors. Moreover, there are still major concerns about compatability with Sharia finance laws, which is being discussed by experts. As a result, the government has not yet managed to finalize the rules," Majid Eshqi was quoted as saying by IRNA.
"Draft regulations are expected to include tasks for the SEO, although they are not finalized," Eshqi added.
The official noted that the SEO, as the regulator of Iran's capital market, is collaborating with other relevant organizations to prepare the groundwork for using blockchain technology in capital market producers.
He noted that the SEO has received a proposal for setting up a “crypto-based fund which is to be tested in the regulatory sandbox.”
Capital market authorities have recently shown interest in using blockchain technology as it can help address some critical funding needs and create new vistas for reviving the struggling share market.
A research by the Tehran Chamber of Commerce, Industries and Mining says an estimated 12 million Iranians have invested in digital currencies.
"Within two years we will be compelled to make use of blockchain technology. It will not be long before we start tokenizing physical assets and stocks that can be traded on the new platforms."
There are two main approaches to regulating the crypto sector. "One considers the crypto as a unit of currency that should be dealt with by central banks. The other sees it as a digital asset and it is in this context that the capital market can and should act a regulatory and supervisory body."
The SEO chief added: "However, issues are still pending and concern about the compatibility of the new technology and Sharia financing principles which must be addressed by the CBI’s Fiqh [sharia law] boards and the SEO."
He urged fintech experts to send capital market officials in Tehran views and suggestions for the efficient use of blockchain technology.
Eshqi urged the Fiqh committees of the SEO and CBI to support tokenization of assets so that shareholders can benefit from innovative technology.
In 2019 the government recognized cryptomining as a legal industry. Miners had to apply for a permit from the Ministry of Industries. Trade in crypto is banned but recently the central bank said banks and licensed moneychangers can use digital currency mined by authorized miners in Iran to pay for imports.
