Iranian Government Could Move Quickly to Regulate Bitcoin, Reports Suggest

NEWS
Pete Rizzo
Mar 14, 2014 at 13:33 UTC  |  Updated  Jun 16, 2014 at 16:48 UTC

A new report from Fars News Agency has surfaced, suggesting that Iran's National Center of Cyberspace (NCC) may consider implementing regulation regarding digital currencies, possibly as soon as this year.

Founded in 2012, the NCC is a government body responsible for implementing policies created by the Supreme Council of Cyberspace (SCC), which oversees Internet issues. The organisation has been described as a major decision-making authority in the hardware and software fields.

Informal translations of the text, corroborated by CoinDesk sources in Iran, suggest that the document provides an overview of bitcoin's benefits, noting that it is not controlled by governments, features irreversible payments and comes with very low transaction fees.

Statements from Saeed Mahdyoon, described in past reports as a telecommunications official with the Iranian government, indicate that the nation sees regulation as necessary, given that the world is quickly adopting digital currency payments and that the positive and negatives of their use are still unknown.

Further, he suggests high-level officials in the Ministry of Economic Affairs and Finance and the Central Bank of Iran may be involved in the deliberations.

Community reaction

A spokesperson for Iran-based bitcoin exchange CoinAva suggested that the reports seemed credible given that the Fars News Agency has ties to the Iranian government. Though, he doesn't believe this is an accurate representation of the agency's internal thinking.

"I see this news as testing the water to get feedback and reaction from other authorities in power rather than an official stance."

Mor Roghani, CEO of Iran-based e-commerce business Persian Shoes, was more positive about the announcement, suggesting also that this won't be the last of Iran's statements on bitcoin. Said Roghani:

"The fact that someone in the government has positive attitude toward bitcoin is fascinating. I think we will see more in the coming months."

Bitcoin ecosystem

Though the current bitcoin ecosystem in Iran remains small, the country's population is predominantly young, meaning more than 50% of the population now uses the Internet.

Estimates from The Washington Post suggest Iran has the highest number of Internet users in the Middle East, and perhaps unsurprisingly, some of these individuals have become interested in bitcoin. The business sector remains small as well.

CoinAva launched in July, while merchants like Persian Shoes and independent musician Mohammad Rafigh are using bitcion as a payment tool to open up paths to new customers.

Notably, speculation on reddit centered on how bitcoin could potentially gain significant inroads given issues with the domestic currency, the rial. In 2012, the currency suffered from severe hyperinflation, though more recent reports now suggest the currency has stablized. Discussions also theorized bitcoin could help the country hedge against harsh sanctions imposed by other nations.

Bitcoin in the Middle East

Though on-the-ground reports are scarce, some companies and countries in the Middle East have acknowledged bitcoin, suggesting awareness may be small but growing. For example, Anghami, a streaming music platform serving the Middle East and North Africa, recently began accepting bitcoin.

The Central Bank of Jordan, the Bank of Lebanon and the Bank of Israel have also commented on digital currency regulation, with Israel and Lebanon issuing warnings to consumers and Jordan limiting its banks ability to work with the sector.

Image credit: Imam Square, Iran via Shutterstock

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