Iran is borrowing a page from China when it comes to regulating money: if your real-world currency is in trouble, crack down on the virtual kind. The country’s central bank has banned other banks and financial institutions from buying, selling or promoting cryptocurrencies in the wake of reforms meant to quell volatility for the Iranian rial, such as banning money changes outside of banks and unifying exchange rates. The rial’s value has been plummeting over fears the US would reinstate sanctions that could hurt Iran’s economy.
The ban is an extension of anti-laundering agency’s ban passed in December.
While Iran’s situation is more volatile than China’s, the objective is likely the same: this could reduce the likelihood that anxious traders will buy up cryptocurrency and sell conventional money. While formats like bitcoin have their own problems with volatility, investors might see that as a better bet than the rial’s record lows. This theoretically pushes people back toward official money and gives it some stability, however artificial it might be.