The Central Bank of Iran plans to conduct a comprehensive review of its policies covering Bitcoin and other cryptocurrencies. The move was made after the government-owned central bank has announced that it is softening its stance on the virtual currencies.
In a press conference in mid-November 2017, Central Bank of Iran Deputy Director of New Technologies, Naser Hakimi, announced that the central bank is studying Bitcoin and planning to examine its policies about digital currencies. He, however, issued a warning to investors about the “uncertainty” and “risk” that they could face in the cryptocurrency market.
“Given that Bitcoin and other currencies have not been introduced by the central bank as the official currency, as well as the risk of buying it and the activity of traders in this field, more precautions are coming into the market because of the possibility of malice.”
In early 2017, Financial Tribune reported that Hakimi has referred to Bitcoin as an “opportunity” that should be exploited by the Iranian government. He claimed then that Bitcoin and other digital currencies can be used by traders who failed to open lines of credit due to banking issues.
Cryptocurrency developments in the Middle East
Aside from Iran, other countries in the Middle East region are tackling virtual currencies. In October, the Lebanese Central Bank governor claimed that the Lebanese government is planning to introduce its own digital currency. It is not clear, however, if the cryptocurrency will be based on Blockchain technology.
Meanwhile, the Head of the United Arab Emirates (UAE) Central Bank, Mubarak Rashed Al Mansouri, has criticized Bitcoin’s lack of supervision and regulation. He claimed that the non-supervision of the leading cryptocurrency facilitates its use in money laundering and terrorism financing.
Lebanese central bank Banque du Liban (BDL) Governor Riad Salameh has claimed that Bitcoin and other virtual currencies are “unregulated” commodities whose use should be prohibited. He also said that digital currencies will be ineffective as national currencies because they are just “commodities.”
At the opening ceremony of the 7th Corporate Social Responsibility Lebanon Forum in late October 2017, Salameh told participants that the BDL prohibited the use of the cryptocurrencies across Lebanon due to their nature resembling that of commodities. He further claimed that money will eventually be digitized in the future.
“These [Bitcoin] are not currencies but rather a commodity whose prices rise and fall without any justification. For this reason, BDL has banned the use of this currency in the Lebanese market. We understand that electronic currency will play a prominent role in the future. But BDL must first make the necessary arrangements before taking this step and develop [a] protection system from cybercrime.”
Lebanon launches own digital currency
At the forum, Salameh also announced the plan by the central bank to introduce its own digital currency. He, however, did not reveal whether the currency will be based on Blockchain technology, which is behind Bitcoin and the other virtual currencies. It is possible that BDL will utilize other forms of technology to create a centralized digital currency in Lebanon as is being done by other countries.
Independent countries such as Ecuador and Sweden are studying the possible use of other technologies in creating their own digital money. Other nations like China are studying the use of Blockchain for their own digital currencies.
Salameh has not provided a timeline on when the central bank will launch its digital currency. He claimed that the digital money will “be available in the next few years.”