Iran bans Banks From Using bitcoin, cryptocurrencies

BERLIN, GERMANY - FEBRUARY 15: In this photo illustration model Bitcoins lying on Dollar bills on February 15, 2016 in Berlin, Germany. (Photo Illustration by Thomas Trutschel/Photothek via Getty Images)

Iran Government has banned the use of bitcoin and other cryptocurrencies by banks and financial institutions on Monday over money-laundering concerns amid ongoing debate over how best to regulate the technology.

The state news agency IRNA reported on Sunday that Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them,” IRNA said, quoting a central bank circular based on a ban on cryptocurrencies passed by Iran’s anti-money laundering body in December.

It said the decision had been made in December by the government’s money-laundering committee and it was now being put into effect.

The ban came because “all cryptocurrencies have the capacity to be turned into a means for money-laundering and financing terrorism and in general can be turned into a means for transferring criminals’ money,”

Iran moved this month to formally unify its official and open market exchange rates and banned money changing outside of banks, after its currency, the rial, plunged to an all-time low on concerns about a possible return of crippling sanctions.

Earlier this year, the country’s 36-year-old telecoms minister Mohammad-Javad Azari Jahromi set up a team to create Iran’s own cryptocurrency.

But there are also fears that the technology could undermine the country’s already weak banking system and exacerbate capital flight.

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