According to a high-ranking government official, cryptocurrency will not be accepted as a form of payment in Iran. His comments came after Iran’s Central Bank established new regulations for the issuance of digital currency in the country. These, on the other hand, are intended for their own “crypto rial,” the pilot phase of which should begin soon.

Accepting Cryptocurrency for Payment will be Call off

Bitcoin and other cryptocurrencies will not be accepted as legal money in the Islamic Republic of Iran. Reza Bagheri Asl, Iran’s deputy minister of communications, stressed the following when discussing regulatory issues relating to the storage and trade of cryptocurrencies:

Payments made with crypto are not accepted.

The government official was responding to the Digital Economy Working Group’s recent resolution on crypto assets. He stated that the usage of any foreign currency is outside of Iran’s sovereignty and in violation of the country’s monetary and banking laws.

As a result, we will not have any legislation that recognises payments made with cryptocurrencies that do not belong to us,” Bagheri Asl explained, according to the Iranian financial news blog Way2pay. He stressed that because Iran has its own national cryptocurrency, “no payments will be conducted with non-national cryptocurrencies.”

The deputy minister went on to say that, in order to protect Iranian residents, the country’s digital asset exchange will be governed by a set of rules similar to those that govern the stock market and other currencies. He went on to say, “Cryptocurrencies must be controlled, and banking systems must be monitored.”

Iran’s Central Bank Provides Information on the Digital Rial Project

Allowing Iranian businesses to use decentralized digital currencies for settlements with overseas partners as a strategy to avoid Western financial sanctions has been contemplated by Tehran officials in the past. The debut of the digital form of the country’s fiat currency, the rial, is what they’re concentrating on right now.

The Central Bank of Iran (CBI) recently notified banks and other credit institutions about legislation governing the “crypto rial,” which has been in development for some time. They apply to the central bank’s digital currency minting and distribution (CBDC). The CBI will be the sole issuer, and the maximum supply will be determined by the CBI.

The digital currency will be built on a distributed ledger system that will be maintained by authorized financial institutions and capable of conducting smart contracts, according to Way2pay. The CBDC’s infrastructure and guidelines have been approved, and it will be piloted in the near future, according to the journal.

According to the article, the crypto rial would be issued within the same legal framework that governs the issuance of banknotes and coins. The CBI will keep track of the digital currency’s economic impact and manage it in accordance with the authority’s monetary policy. Users will be able to conduct business with the CBDC exclusively within Iran’s borders.