Iran Could Ban Bitcoin for Payments, Central Bank Report Suggests

The Central Bank of Iran appears set to prohibit "Unapproved" cryptocurrencies from being used for payments in the country, according to a draft report obtained by CoinDesk.

According to a translation of the draft report entitled "Obligations and Rules Regarding Cryptocurrencies," "Any cryptocurrency wallets will be used only for holding and transferring cryptocurrencies and integrating any kind of services in wallets using cryptocurrencies is forbidden."

If the plan is ultimately approved, the central bank will effectively seek to block the use of unapproved cryptocurrencies as a means of payment.

The report indicates that the Central Bank of Iran will not directly restrict anyone from personally holding or transferring small amounts of approved cryptocurrency.

It's not immediately clear which cryptocurrencies will receive approval, though a source with knowledge of the process told CoinDesk that regulators want all bitcoin transactions in the country to be settled in the Iranian rial and don't approve of its use as an official means of payment.

The report will be discussed during the Electronic Banking and Payment Systems conference in Tehran that starts on Jan. 29, they said.

Plus, Iranians could be barred from holding large amounts of cryptocurrency in the same way they are officially restricted from owning more than 10,000 euros outside of their regulated bank accounts, according to the report.

A Tehran-based cryptocurrency advocate and developer, who spoke to CoinDesk on the condition of anonymity, said that the community in Iran is "Shocked" by the developments and that "This may be worse specifically for businesses that receive bitcoin from foreign customers, since there is little KYC procedures with foreign customers and now also businesses can't have their bitcoins directly."

Notably, the report states that tokens pegged to fiat currencies, precious metals and commodities are similarly prohibited as means of payment.

Further, the report indicates that the central bank will create and update a list every three months for cryptocurrencies that are allowed to be traded on exchanges.