Potentially one of the biggest Asian markets for bitcoin, Iran is still struggling to find a coherent approach towards cryptocurrency. There are almost 50 million internet users in the country, however until recently online financial facilities available here were but rudimentary. The Iranian government made first moves to develop its policy on bitcoin in 2014, but so far there is no clear indication whether it is going to be prohibitive or permissive.
Like many other governments, Iran provides no legal support to bitcoin’s monetary status. The law only acknowledges physically issued notes and coins as national currency, which rules out any digital money. However its use and circulation beyond the scope of ‘legal tender’ is not directly prohibited. No serious attempts have been noticed to officially tighten the rules for bitcoin users. In the report on bitcoin published by the Islamic Parliament Research Center, the officials only express concerns about possible illicit use of the cryptocurrency for money laundering, fraudulent activities and tax evasion, which is quite reasonable. Potential risks of money loss for individuals investing in bitcoin were also mentioned. Nevertheless, many Iranians eagerly use the cryptocurrency both for international money transfers and online shopping.
A number of websites operating from abroad, such as Australia-based CoinAva or IRChange, make it possible to directly convert Iranian rials to bitcoins and the other way around. Regardless of web censorship, these foreign exchanges can be easily accessed using VPNs and other anonymising internet tools. In August 2015 the first Iranian real-time bitcoin exchange BTXCapital was opened. It offers instant deposits to bitcoin wallets, real-time buy and sell orders and convenient user interface in Farsi. Although the progress of the cryptocurrency in retail sector is still rather sluggish, there are a number of internet shops in Iran selling goods for bitcoins. It is worth mentioning, however, that most of these vendors prefer somewhat shadowy status and do not register with eNamad, the official licensing system which provides governmental backing to online businesses. It was also reported that among some internet developers and IT specialists in Iran bitcoin is often preferred to local currency, Euros or US dollars as a means of payment.
The most specific application for bitcoin in Iran was found rather early due to the fact that the country lives under Western economic sanctions. As a part of financial embargo international debit and credit card providers cannot directly operate here. Recently Iran’s banks have been disconnected from the electronic payment system SWIFT which made transactions from foreign accounts impossible. Bitcoin with its independent decentralised infrastructure seems to be a perfect alternative, allowing to bypass these limitations. Many Iranians working abroad are able to support their families back home using bitcoin transactions.
But overall the popularity of bitcoin in Iran remains considerably limited for a number of reasons. It is still restricted to a technically advanced minority who have access to online financial tools. In the toughening economic conditions the once notorious instability of bitcoin against both major world currencies and local rial became the main deterrent for Iranian middle class. But most of all, before the official policy concerning bitcoin is clearly articulated, its future in the Islamic Republic is hardly predictable.