As cryptocurrencies, especially Bitcoin, hit record highs, the Central Bank of Iran has recommended the public to refrain from investing in the digital currency.
“People must be aware of the risks associated with putting money in crypto-assets…crypto prices are highly volatile and there is simply no oversight body to control the market and investors are likely to incur huge losses,” Mohammadreza Mani Yekta, deputy head of CBI’s office for payment systems was quoted as saying by IBENA.
The warning comes after the systemic leap in the price of cryptos. The unprecedented rally in Bitcoin continues hitting the $27,647 mark on Sunday. This was another milestone after it touched $25,000 on Dec 25 and $26,000 a day later.
The judiciary in Tehran has reported a jump in court cases related to illegal cryptomining calling for effective measures to further restrict subsidized electricity for mining cryptocurrencies.
“Utilities and the Ministry of Industries need to work closer with the judiciary to help curb illegal cryptomining and cryptomining-related offences,” IRNA quoted Ali Tazreji, a judicial official as saying last week.
In July 2019 the government said it will recognize cryptocurrency mining as a legal industry. This was first welcomed by miners as a positive gesture. But soon many complained about the high power tariffs and took their lucrative, but illegal, operations underground to deceive utility companies.
The CBI said earlier that activities related to cryptocurrency are illegal, banning people and organizations from using them.
However, regulations need to be amended to include penalties for unauthorized mining and trading cryptocurrencies. The CBI and parliament are working on this issue, Mani Yekta said.
Average daily crypto transactions in Iran is estimated at $10 million to $40 million. The official, however, denied rumors spread by vested interests about high profits arising from cryptocurrency trade in Iran. “Studies show that cryptocurrencies had no significant role in Iran’s economy…They made no contribution to bypassing the sanctions.”
Following the US administration’s unilateral withdrawal from the Iran nuclear agreement and imposition of an economic siege in 2018, experts proposed the CBI allow use of blockchain technology to evade the hostile restrictions.
In a report published in 2018, the Majlis Research Center called for targeted use of cryptocurrencies to circumvent sanctions imposed by the delusional US president, Donald Trump.
The CBI official stressed that the regulator will come up with new and effective measures to serve national interest. He did not elaborate. In October, the government ratified regulations for legal cryptocurrency mining to help pay for imports.