Four Iranian Banks Jointly Develop A Gold-backed Cryptocurrency But The Capital Is Still Pessimistic About Cryptocurrencies

Iranian Central Bank Bans Cryptocurrency Transactions amidst currency crisis

A few days ago, as reported by, the CEO of Binance, Changpeng Zhao said that we are still in the “beginning of the beginning of the blockchain revolution”. Apparently, Zhao isn’t the only one to share such a sentiment. During the annual Electronic Banking and Payment Systems Conference that was hosted by the Monetary and Banking Research Institute in Iran, the blockchain revolution was vividly discussed.

Iran Is Waiting For The Blockchain Revolution

Iran unveiled its plans to explore the blockchain and digital currency world. Ali Divandari, the director at the institute, talked about the realities of blockchain technology stating that they should be embraced. Other experts during the conference talked about the kind of opportunities that blockchain presents to the financial industry in Iran.

During the meeting, four banks from the country announced that they have created a cryptocurrency that is backed by gold called PayMon. The goal is to tokenize some of their reserves. The central bank of Iran, right after the conference talked about its overall approach stating that it has decided to recognize, authorize and even favor cryptocurrencies, mining, exchanges, and initial coin offerings. While the central bank said it was making these plans, it confirmed that the use of cryptocurrencies within the country is still illegal.

The Central Bank’s Vice Governor of Information Technology, Naser Hakimi, said that the new policies suggested by the CBI are still being reviewed. He did say that a conclusion will be reached by the end of the year, hopefully.

This isn’t the first time the Iranian authorities are looking into cryptocurrencies. Just before the cryptocurrency winter last year, when BTC was soaring, Abolhassan Firouzabadi, the secretary of the presidential commission, wasn’t hostile toward cryptocurrencies. He said that Iran was considering creating a clear, regulatory framework for cryptocurrencies and blockchain technology.

The fact is that the Iranian authorities are still skeptical about cryptocurrencies as they are weighing the risks against the benefits of blockchain technology. Things like high volatility and decentralization make cryptocurrencies risky. Following the ban of cryptocurrencies in Teheran, the capital of Iran, the cryptocurrency community started looking for alternative ways to use digital tokens.

Apart from the state’s concerns about the high volatility and lack of regulatory framework, there is still the issue of vali-e-faqih. This gives the Islamic jurists the power to have the final say in every controversial political issue. Unfortunately, these jurists are still not interested in giving it a shot.

A member of the Jurisprudence Council of the CBI, Seyyed Abbas Mousavian, in January 2018, said that he is worried about the high volatility of cryptocurrencies among other things. In April, his doubts and the doubt of other members of the council materialized into a verdict against cryptocurrency assets. He said that these assets are not ideal because they are not based on any real asset and they make citizens who believe in the society’s wealth pour money into the pockets of unbelievers giving them more dominance in the society.

Even during the Electronic Banking and Payment Systems Conference that took place last month, Mousavian expressed his disapproval of cryptocurrencies stating that he doesn’t believe Bitcoin is money. It’s true that some institutions within the country are trying to explore this emerging tech, with the current situation, it is unlikely that the country will ever be a good environment for cryptocurrencies to thrive.

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Do you think Iran can create a regulatory framework that would be favorable for cryptocurrencies and the underlying blockchain technology? Feel free to express your thoughts.

Max writes about blockchain projects and regulation with a special focus on United States and China. He joined Smarterum after years of writing for various media outlets.


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