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28-02-2025
TEHRAN: Iranian authorities have again been cracking down on cryptocurrencies and online exchanges as the value of the national currency plummets in an economy in turmoil.
Last month, the Central Bank of Iran (CBI) suddenly stopped rial payments in all cryptocurrency exchanges, leaving more than 10 million crypto users unable to spend rials on Bitcoin and other global online currencies.
A main goal was to counter further depreciation of the embattled national currency by stopping it from changing hands for foreign currencies.
The crypto market grew significantly last year and leans towards a bullish 2025 as countless young Iranians turn to a growing global market to make money in a largely isolated economy straining under harsh Western sanctions.
The move had been tried before at limited junctures, but never for so long and at such a scale, seeming to be part of a larger governance effort by an establishment that wants stringent levels of control and oversight on the burgeoning crypto community.
The economy has been plagued by inflation rates of more than 40 percent for years, and remains disconnected from the global payments system.
CBI establishes authority
After imposing the block, the central bank mostly maintained radio silence, not offering clarifications to the public.
The CBI also did not respond to an Al Jazeera request for comment.
In a public statement, it merely noted that CBI governor Mohammad Reza Farzin participated in a meeting of the heads of government, judiciary and parliament last month and that CBI was given “full authority to monitor and manage the cryptocurrency market” during that meeting.
President Masoud Pezeshkian also sent a letter, published in the media, to Farzin last week, emphasizing that CBI is the “sole trustee to manage” the crypto market.
The meeting last month also concluded that the government wants to see more export trade bringing cryptocurrencies into the Iranian market, but did not indicate how this was to be accomplished.
The new restrictions appear to be part of strict measures to prevent currency depreciation, coming as CBI pumps more foreign currency into the volatile local market and police periodically announce the arrest of illegal currency traders in the streets of Tehran and other major cities.
The Iranian rial continued its slide this week, hitting a new all-time low of more than 940,000 per US dollar. A dollar fetched less than 600,000 rials in October last year, and less than 40,000 in early 2018.
The national currency has been experiencing a sharp decline in recent weeks amid escalating regional conflicts, blows to the Tehran-led “axis of resistance”, and Donald Trump’s insistence on a “maximum pressure” campaign.
A 4 percent cap for USDT?
Days after its sudden decision to ban rial purchases of cryptocurrencies, CBI imposed conditions on online exchanges and started negotiations with them.
Many smaller exchanges were forced to accept at least some of the conditions, including providing proof of reserves. Some have had their rial gateways restored at limited capacities, while others are still negotiating.
Some of the “proposed measures” by CBI comprised top levels of access to customer information, including real-time access, constant updates, and an ability to block users whenever deemed necessary, according to documents reviewed by media. (Int’l Monitoring Desk)
