The Iranian government has moved to make digital currency channels to markets more high-risk and bemusing than before. According to a local news outlet, ArzDigital, the Iranian legislators submitted a proposal to add cryptocurrencies to Iran Currency Smuggling laws and foreign fiat exchange regulations.
The aftermath of the potential inclusion of digital currencies; is that Iranian investors face a bigger threat of being indicted by local authorities or face sanctions from the Americans. The legislation would require cryptocurrency exchanges to secure a license from the Central Bank of Iran, and comply with legacy foreign currency exchange regulations.
Exchanges to adapt to fiat Iran Currency Smuggling laws
It is unclear how the current cryptocurrency exchanges would adapt blockchain technology to the Iran fiat norms. However, it is apparent that the Iran administration is seeking to get rid of capital outflow through preventive justification to shut down or punish local cryptocurrency exchanges.
Nevertheless, the country’s market does not strictly consist of local, over the counter players. In contrast to forex exchanges, a number of cryptocurrency businesses operating in Iran are lawfully regulated in other nations. It is still not clear how the potential licensing system will apply to the decentralized ecosystem.
For instance, KingMoney and Ubyte are exchanges owned by an Iranian businessman,Reza Khelili Dylami, but regulated under Swedish regulations. These two exchanges have in the past been earmarked as scams due to ties with Iran. Although the exchanges are not licensed in Iran, they have been efficiently facilitating cross-border payments with Ubyte transacting over $13.8 million with native exchanges as per a Chainalysis report.
It’s still blurry whether Trump’s government is pressurizing Iran in order to avoid international trade sanctions. However, it’s not clear how exchanges would circumvent sanctions in future; if they are registered and monitored by the Central Bank of Iran.