Iran Warns Crypto Investors Amid Ban on Bitcoin Mined Outside Its Borders
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The Iranian government is warning its citizens about the risks of bitcoin and other digital currencies following a move to ban mining outside of the country, including prohibiting banks from dealing in crypto. Iran’s central bank, the State Bank of Iran (SBI), has issued a ban on public and private financial institutions from dealing in cryptocurrencies, including bitcoin, warning that the country’s banks could be hit by a wave of “financial crimes” due to the anonymous nature of virtual currencies. The ban also outlaws the use of bitcoin mining equipment.
Government officials in Iran have issued a warning to citizens about the risks involved in investing in digital currencies. Iran’s state-run media outlet, IRNA, reports that the government wants to protect investors from the possibility of “falling prey to the virtual currency [bitcoin]” and “its volatility and risky fluctuations.” The warning follows an announcement by the Central Bank of Iran that it would ban banks and financial institutions from dealing in cryptocurrencies.
The Central Bank of Iran has issued a warning against rampant cryptocurrency trading, reminding investors that only cryptocurrencies mined by licensed miners in the Islamic Republic can be used under certain circumstances. Traders will be fully responsible for the risks, the bank warned, although it remains legal to issue cryptocurrencies for import through licensed banks and exchanges.
Iranian central bank rejects cryptocurrency investments despite falling stock markets
The popularity of cryptocurrencies among Iranians has increased significantly with the rise in prices of decentralized assets in recent months, the Fars news agency said in its report. Exchange platforms for cryptocurrencies have benefited from the instability of the Iranian stock market, which has seen a significant drop in trading since last summer. Mohsen Alizadeh, a member of the Supreme Council of Securities and Exchange, which controls the stock market, was quoted by ILNA:
The outflow of capital can be tracked. Liquidity spilled over into parallel markets, including digital currencies.
According to him, 1.5 trillion rials of capital, or $7 billion, left the Iranian stock market through large shareholders and institutional traders. According to the Financial Tribune, the main index of the Tehran Stock Exchange, the TEDPIX, has fallen by 50% in recent months. In this regard, the Central Bank of Iran has advised Iranians to avoid transactions in cryptocurrencies and warned them that investments in cryptocurrencies are made at their own risk.
The CBR has effectively banned the use of cryptocurrencies mined abroad. In a statement released this week, the financial authority reminded the Iranian public of an earlier government ruling that only cryptocurrencies mined in Iran that comply with the law can be transferred. Authorized exchanges and banks can make payments in foreign currency intended for import with domestically mined cryptocurrencies, according to the report cited by Fars.
In April, the CBR authorized the use of decentralized money in cross-border payments with foreign suppliers, in accordance with its guidelines. Cryptocurrencies issued for import must be supplied by cryptocurrency miners operating in Iran. Mining companies must obtain a permit from the Ministry of Industry, Mines and Trade, the agency said.
New rules and regulations applicable to trading in cryptocurrencies
A report cited by Bitcoin.com News in April showed that licensed lenders and exchanges have been briefed on cryptocurrency payment rules. Iran’s Central Bank has adopted a new policy to circumvent or at least minimize the impact of US sanctions on Iran’s financial transactions with the rest of the world.
The recent announcement by the CBI suggests that the same rules apply to cryptocurrency trading. The central bank announced that in accordance with a cabinet decision, trading in digital currencies created abroad has been banned and only currencies created in the country can be traded, according to an unedited English translation of a tweet in Farsi published by Iran International News Channel.
The CBR is also considering launching its own digital central bank currency (CBDC). Earlier this year, it said it was considering various options for issuing a digital rial and studying similar projects in countries such as China and Russian Federation. At the same time, the bank reaffirmed that it will comply with the laws against money laundering. In January, Governor Abdolnaser Hemmati promised that the CBI would continue to implement rules restricting financial transactions through anonymous accounts.
What do you think of Iran’s warning against investing in cryptocurrencies and banning the use of cryptocurrencies mined abroad? Tell us what you think in the comments section below.
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Ban, capital flight, cbi, central bank of iran, coins, crypto, cryptocurrencies, exchange, import, iran, islamic republic, miners, mining, sanctions, exchange, trade.
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