Iranian authorities are tightening their grip on cryptocurrencies as the national currency plunges to unprecedented lows. The Central Bank of Iran (CBI) recently halted rial payments across all cryptocurrency exchanges, leaving over 10 million users unable to purchase digital assets like Bitcoin. This move aims to curb the depreciation of the Iranian rial by preventing its exchange for foreign currencies.
The Iranian economy continues to grapple with soaring inflation, exceeding 40% annually, while remaining disconnected from the global financial system. Amid these conditions, many young Iranians have turned to the cryptocurrency market to seek financial opportunities. Despite severe Western sanctions, crypto trading surged in 2024, with expectations of further growth in 2025.
The recent measures are the most extensive yet, reflecting a broader strategy to exert strict control over the crypto sector. Previous attempts to limit cryptocurrency exchanges were temporary and more localized, but the current crackdown is nationwide and open-ended.
The Central Bank of Iran has largely remained silent since imposing the ban, offering little clarification. In a brief statement, the CBI confirmed that Governor Mohammad Reza Farzin was granted “full authority to monitor and manage the cryptocurrency market” during a high-level government meeting.
President Masoud Pezeshkian reinforced this stance through a public letter, emphasizing that the CBI is the sole entity authorized to regulate crypto activities. Although the government has expressed a desire to facilitate cryptocurrency-backed export trade, specific plans remain unclear.
The currency’s value continues to plummet, reaching a new record low of over 940,000 rials per US dollar—a significant fall from 600,000 in October 2024 and 40,000 in early 2018. The decline is driven by regional conflicts, setbacks to Tehran’s geopolitical ambitions, and the lingering effects of former U.S. President Donald Trump’s “maximum pressure” campaign.
Days after the payment ban, the CBI began negotiations with cryptocurrency exchanges, enforcing stringent conditions. Smaller platforms were compelled to comply with new requirements, such as providing real-time access to customer data and the ability to block users at will.
A key proposal includes capping the daily fluctuation of cryptocurrency prices. For Tether (USDT), a widely used dollar-pegged stablecoin, the CBI seeks to block trades if its value increases by more than 4% within a day.
While some exchanges have resumed limited rial transactions, others remain in talks with authorities. Meanwhile, many users have turned to alternative methods, such as using unofficial bank accounts to process payments. Crypto withdrawals remain unaffected, allowing users to transfer funds out of their accounts if desired.
The CBI’s aggressive stance has sparked backlash from industry leaders and politicians. Abdolnaser Hemmati, a former CBI governor and current Economy Minister, faces potential impeachment by hardline lawmakers. Critics argue the crackdown reflects a short-term strategy to deflect from deeper economic issues.
Eisa Keshavarz, CEO of the local exchange Ubitex, criticized the government for pursuing “double policies” that push citizens toward foreign platforms while restricting domestic services. “People have a right to protect their purchasing power through crypto or other assets,” Keshavarz told Al Jazeera, warning that increased restrictions could drive transactions underground.
Experts anticipate further regulatory measures as the government seeks new revenue sources to address a widening budget deficit. Iran legalized cryptocurrency mining in 2019 but imposed strict controls, driving many operators out due to frequent energy-related shutdowns.
The Supreme Council of Cyberspace recently released a regulatory roadmap that suggests increased scrutiny on international crypto transactions. According to blockchain researcher Saeed Khoshbakht, this could expose Iranian users to sanctions or blacklisting by global exchanges.
Khoshbakht warned that the government’s emphasis on “minimizing risks” appears to prioritize state interests over consumer protection. “Without specifying protection for citizens, these measures may lead to more limitations disguised as regulatory oversight,” he said.
As Iran’s economic crisis deepens, the government’s heavy-handed approach to crypto suggests a long-term battle between regulatory forces and a tech-savvy population determined to preserve their financial autonomy.
