Iran Bans Use of Cryptocurrency for Fear of US Sanctions

Iran has banned the use of cryptocurrencies by the country's financial institutions after the government decided to put in place measures to combat money-laundering, the state news agency IRNA said.

RELATED: 
Venezuela Says Trump Ban on Petro Backfires, Doubles Investors

“Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them,” IRNA reported.

The institutions are prohibited from buying, selling or promoting cryptocurrencies. The Iranian rial's value has been plummeting over fears the United States will reinstate sanctions in May.

“The use of bitcoin and other cryptocurrencies in all the country's monetary and financial centers was banned,” the central bank said in a statement. The release further explained that "all cryptocurrencies have the capacity to be turned into a means for money-laundering and financing terrorism and in general can be turned into a means for transferring criminals' money.”

Earlier this year, Telecoms Minister Mohammad-Javad Azari Jahromi set up a team to create Iran's own cryptocurrency.

"This ruling referred directly to banks, financial institutions and currency exchangers that work with the central bank," Hadi Nemati, from cryptocurrency exchange platform Coinex, told AFP.

The digital currencies are largely viewed as a means to circumvent issues related to international sanctions and other financial difficulties.

"In my opinion, it doesn't include the general public – it's not a total ban on cryptocurrencies."

Nemati said Coinex stopped all activities on its exchange platform saying "we always want to make sure we comply with the law."