Economy, Business And Markets

Iran's CB Issues Warning Over Bitcoin and Other Cryptocurrencies

The Central Bank of Iran has warned people to tread very carefully and informatively when buying Bitcoins and other cryptocurrencies
Nasser Hakimi, the head of CBI’s Innovative Technologies Department, attends a press conference in Tehran on Nov. 13.
Nasser Hakimi, the head of CBI’s Innovative Technologies Department, attends a press conference in Tehran on Nov. 13.

While the Central Bank of Iran has yet to adopt an official regulatory stance on cryptocurrencies, it has warned citizens and investors against indiscreetly using them, especially the most famous of virtual currencies, Bitcoin.

“Because Bitcoin and other cryptocurrencies have not been introduced by the CBI as official currencies and in light of the high risk and speculative activities associated with purchasing them, we ask investors and the public to enter this field with increased caution because they could lose their money,” Nasser Hakimi, the head of CBI’s Innovative Technologies Department, was reported as saying on Monday.

“Mechanisms of control and supervision over the supply of cryptocurrencies are being implemented through the collaboration of the central bank and other related entities, but the people must familiarize themselves with their risks and dangers on the demand side,” he added.

The comments come at a particularly volatile time for Bitcoin that has recently experienced its third steep decline of the year after briefly skyrocketing to around $7,800.

As Hakimi said, two major concerns exist for the policymaker in this regard, the first being the excessive fluctuations of cryptocurrencies and the persistence of speculative activities around them emerging as the second.

“Some are using multilevel marketing and pyramid schemes to introduce Bitcoin as an attractive option for investment and that might put people’s capital in danger,” he added.

  Legal Frameworks by March 2019

The CBI official also outlined the overarching path envisioned by the policymaker for fintechs and cryptocurrencies by the end of the next fiscal year in March 2019, which includes publishing a total of six documents providing general guidelines and frameworks, rather than detailed regulations.

From the total of six documents, the first two respectively dealing with payment initiators and payment facilitators have already been published in the past few months.

“The third document relates to the framework for fintechs, which covers micropayments and all the technologies that can be employed by them to offer these services,” Hakimi said, adding that the document will be published in the next two to three weeks.

The next document to be published by Jan. 21, 2018, deals with the framework for the operations of account information managers, whereby fintechs will be able to offer services that allow people to manage their bank account information across multiple lenders.

The fifth document is about cryptocurrencies, which will be unveiled by the time the sixth month of the next fiscal year comes to an end in September 2018.

“Two categories are considered here, with the first being the framework that should be adhered to for using cryptocurrencies,” he said.

“The second category deals with the possibility of a national virtual currency, either to be generated by the central bank or another entity, and how it could potentially take form.”

The last CBI document to be published by March 2019 deals with fintechs offering loans and facilities which, as Hakimi notes, would outline peer-to-peer lending, crowdfunding and crowdlending.

“I believe such facilities will prove to be effective in relation to microloans and boost financial inclusion for the people,” he said. 


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