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Central Bank Clamps Down on Crypto as Iranians Dodge Regulations to Hedge Rial's Freefall
Generated by AI AgentCoin World
Monday, Sep 29, 2025 11:48 pm ET1min read
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The Central Bank of Iran (CBI) has intensified its regulatory grip on cryptocurrency transactions, implementing a series of measures to stabilize the national currency as the rial approaches record lows. Effective in early 2025, the CBI shut down rial-based payment gateways for cryptocurrency exchanges, requiring platforms to obtain licenses and submit transaction data for transparency[1]. This move aligns with broader efforts to curb speculative activity and mitigate the rial’s depreciation, which has been exacerbated by economic sanctions and energy-driven inflation[2].
Iran’s approach to cryptocurrency remains a hybrid of restriction and strategic adoption. While crypto mining is legal and incentivized as a sector to circumvent U.S. sanctions, domestic use of digital assets for payments remains prohibited[3]. The CBI has mandated that licensed miners sell their mined cryptocurrencies to the central bank, effectively channeling crypto-generated revenue into state coffers to fund imports[4]. This policy reflects a dual strategy: leveraging crypto’s potential to bypass sanctions while maintaining strict control over its domestic circulation.
The rial’s decline has further complicated the regulatory landscape. In February 2025, the Iranian government imposed a nationwide ban on cryptocurrency advertising, both online and in physical spaces, to prevent public exposure to volatile assets[5]. Simultaneously, the CBI introduced a digital rial initiative, utilizing Hyperledger Fabric technology, to modernize the financial system and reduce reliance on the U.S. dollar[6]. A pilot trial of the digital rial was launched in 2023 on Kish Island, a free trade zone, as part of broader efforts to digitize financial infrastructure[7].
Energy consumption remains a critical challenge.
mining in Iran, which accounts for approximately 4.5% of global activity, has strained the national grid, prompting the Ministry of Energy to impose consumption ceilings on licensed miners[8]. While the low cost of electricity has made Iran an attractive hub for mining, the environmental and economic toll has drawn criticism, particularly amid public dissatisfaction over energy shortages[9].The CBI’s regulatory framework is enforced through collaboration with multiple agencies, including the Financial Intelligence Unit (FIU), which oversees anti-money laundering (AML) compliance, and the Supreme Council of Cyberspace, which governs internet-based crypto activities[10]. These bodies work to ensure that crypto transactions adhere to strict AML and counter-terrorism financing (CTF) protocols, with businesses required to conduct Know Your Customer (KYC) checks and report suspicious transactions[11].
Despite these measures, the rial’s freefall—driven by sanctions and capital flight—has pushed many Iranians toward unofficial crypto markets. The CBI’s closure of rial payment gateways in 2025 has not entirely curtailed this trend, as users seek alternative channels to hedge against currency instability[12]. Analysts note that while the state’s control over crypto transactions has strengthened, the underlying economic pressures persist, with the rial’s value remaining a key indicator of systemic vulnerability[13].
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