Iran bans use of cryptocurrencies

Iran's central bank has officially banned the use of cryptocurrencies in financial transactions in order to prevent money laundering and terrorism, a newspaper reported Monday.

The move is seen as part of Tehran's efforts to control the currency market after the rial hit an all-time low earlier this month.

The Donya-e-Eqtesad daily says the ban applies to "all monetary and financial centres of the country," including banks, financial institutions and currency exchange offices.

Though cryptocurrencies, such as bitcoin, have never been authorised in Iran, they were available in parallel markets.

Cryptocurrencies are created and exchanged independent of banks or governments. Transactions are typically anonymous, but the currency can be converted into cash when deposited into accounts at prices set in online trading.

Only a small handful of countries ban cryptocurrencies outright, but there are several large countries with existing laws or regulations that may make bitcoin holding and trading a legal grey area.

The largest economy that bans bitcoin and other currencies outright is the South Asian country of Bangladesh. Bolivia and Ecuador ban citizens from holding cryptocurrencies, but trading in those countries still happens because of lax enforcement. The former Soviet state of Kyrgyzstan also bans the currencies.

Digital currencies in several other countries are tightly regulated. The Russian government has taken efforts in the last year to put tighter regulations around their usage and trading. In China, there are tight regulations on exchanges and the proliferation of initial currency offerings, also known as ICOs.

Venezuelan President Nicol·s Maduro in February launched the petro, the first-ever state-backed cryptocurrency, as a way to circumvent US financial sanctions and provide a potential store of value for regular Venezuelans who've seen their incomes fall in tandem with their rapidly plummeting currency.

But within weeks, the Trump administration banned Americans from trading in the digital currency, considering it a financial lifeline to a socialist government that has jailed its opponents and banned them from upcoming presidential elections.

Maduro boasted he had received $5 billion in offers for the petro. But so far, only a small fraction have actually changed hands, according to the blockchain used to account for the petro's movements.

AP