The Central Bank of Iran (CBI) has just released a draft of cryptocurrency regulations, squashing its earlier ban. Announced at today’s Electronic Banking and Payments Systems Conference in Tehran, the regulations map out guidelines for crypto-related businesses and traders.
While the draft recognizes Bitcoin and Ethereum, crypto enthusiasts are not yet able to spend them online or at retail outlets, as payments must still be made using Iranian rials.
The draft also recognizes Iran’s own state-backed cryptocurrency, which is currently in development, and other regional cryptocurrencies.
Dubbed “Version 0.0,” the regulatory framework for cryptocurrencies was published on the bank’s website, according to a report by Al-Jazeera.
Initial plans for the central bank’s cryptocurrency were revealed after the US imposed tight economic sanctions on Iran following the breakdown of the Iran nuclear deal. The cryptocurrency, if adopted, could be used as a way around US sanctions.
The digital currency could also enable Iran to leverage an emerging network by joining a blockchain-based international payments system designed to rival Swift, the world’s largest network for financial communications –which has disconnected Iranian banks, in accordance with US sanctions.
The cryptocurrency will be built on Hyperledger, a blockchain platform created by the Linux Foundation.
According to the Informatics Services Corporation, an affiliate of the Central Bank of Iran, the cryptocurrency will run on a private blockchain controlled by the central bank.
This will allow the central bank to make amendments to the blockchain without consent from token holders.
The cryptocurrency is expected to facilitate payments between Iranian banks and other Iranian financial institutions active in the crypto space, and may eventually be used by the Iranian public to pay for local goods and services.
Iran has also engaged in a blockchain cooperation agreement with Russia and Armenia.
Bitcoin.com reports that Russian signatory Yuri Pripachkin, who leads the Russian Association of Cryptoindustry and Blockchain, says,
“According to our information, an active development of an Iranian version of Swift is currently under way.”
Russia continues to actively work with partners to make financial systems that are fully independent of Swift.
The Electronic Banking and Payments Systems Conference, which is held in Tehran from January 29 – 30, is the eighth banking and payment systems conference hosted by the Central Bank Monetary and Banking Research Institute. The conference is focused on blockchain technology, cryptocurrencies, alternative payment systems, financial technologies, fraud, money laundering and digital transformation.