What has happened?

The Central Bank of Iran (CBI) has banned the country's financial businesses from dealing in cryptocurrencies, including bitcoin.

What does this mean?

According to a press release by the Iranian state news agency IRNA last week, the CBI has prohibited the use of cryptocurrencies within financial institutions, among concerns over money-laundering.

"Virtual currencies have the option to be used for money laundering, supporting terrorism, and exchange of sums between wrongdoers," INRA said, quoting a CBI's circular. According to the circular, financial institutions must now avoid the sale or purchase of cryptocurrencies, as well as not take steps to promote them.

The press release states that the circular was based on a ban on cryptocurrencies passed by Iran’s anti-money laundering body in the last Iranian calendar year (which ends on 20 March 2018).

The move follows a couple of warnings against the dangers in investing in cryptocurrencies.

In February 2018, the head of the CBI's Information Technology Department Nasser Hakimi warned the public against investing in virtual currencies, calling them "arbitrary mechanisms" and citing the many risks associated with them, such as high volatility.

A month before, the Governor of the CBI Valiollah Seif also cautioned investors against cryptocurrencies, advising them to stay clear of "such risky illegal tenders". However, other officials have previously shown supportive views towards virtual currencies.

For example, in November 2017, the head of country's High Council of Cyberspace Abolhassan Firouzabadi said that the council would welcome bitcoin, but under specific regulations.

Next steps

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