As the cryptocurrency sector continues to expand in Iran, despite its decentralized nature, the absence of proper regulations and legal frameworks is increasingly felt by market participants. Effective regulation and oversight of this sector require collaboration between the private and public sectors.
According to Saed News, quoting Eghtesad Online, the emergence of cryptocurrencies has significantly transformed lives across the globe, revolutionizing financial and economic systems. Although the crypto market is decentralized, the rapid growth of this sector has highlighted the need for a well-defined regulatory framework.
While regulation may seem contradictory to the decentralized nature of cryptocurrencies, the absence of clear rules can lead to an unstructured system, making it easier for fraudsters to exploit investors.
In Iran, interest in cryptocurrencies has surged in recent years. However, the rapid expansion of this market, coupled with a lack of regulatory clarity, has left users vulnerable. Cases of fraud by certain exchanges and individuals have been reported, resulting in significant financial losses for many investors.
Thus, establishing a proper regulatory framework for blockchain and cryptocurrencies could drive economic growth and enhance user security. However, designing an effective regulatory system requires meaningful collaboration between both the private and public sectors.
To discuss the current state of regulation in the cryptocurrency sector, Saed News interviewed Abbas Ashtiani, CEO of the Iranian Blockchain Association.
Ashtiani emphasized the rapid expansion of blockchain and cryptocurrency markets, stating:
"The COVID-19 era has proven that the digital economy is borderless. Today, the digital economy holds a significant share of the global GDP. Blockchain and digital assets are inherently adaptable to regulation, but they do not conform to rigid governmental directives. Their decentralized nature makes bans or prohibitions ineffective, often leading to capital flight and the underground expansion of the sector."
He warned that the lack of regulation not only leaves investors unprotected but also creates an environment where fraudsters thrive. On the other hand, excessively strict, license-based regulations can be just as harmful, stifling innovation and growth.
"When there is no regulation, fraud increases, and it becomes difficult for people to distinguish between legitimate and fraudulent projects. Education in this sector also suffers, ultimately harming consumers. At the same time, heavy-handed, restrictive regulations will only push the industry further underground, creating even more risks for users."
Ashtiani highlighted that regulatory approaches for cryptocurrencies must be unique. The Iranian Blockchain Association proposed a self-regulatory framework to the Supreme Council of Cyberspace and the Central Bank two years ago. He noted that a recent government development plan, issued by the president three weeks ago, includes provisions for blockchain and digital assets, marking a step in the right direction.
However, Ashtiani pointed out that the private sector has been largely excluded from the decision-making process.
"For too long, private sector organizations have only been given a consultative role on paper but have been excluded from actual decision-making. This outdated approach has caused significant harm to the country’s economy, with no accountability for the resulting failures."
He called for the Iranian Blockchain Association, as the country’s first and largest scientific organization in this field, to be actively involved in regulatory decisions, stressing that a well-balanced regulatory framework cannot be established without input from industry experts.
Ashtiani also criticized the lack of transparency in regulatory discussions within the Presidential Economic Office and the Ministry of Economy.
"While we appreciate that regulations are being developed, we strongly oppose a passive, restrictive, or license-based approach. Modern regulatory methods exist for the crypto industry, and we have already proposed them to the government."
He further explained that cryptocurrency exchanges operating in Iran are not actual exchanges but rather digital asset trading platforms, which currently lack any form of regulatory oversight. He clarified that the Ministry of Economy, not the Central Bank, should be responsible for overseeing these platforms.
Ashtiani also warned that the number of cryptocurrency-related legal disputes is rising rapidly, and urgent regulatory action is needed to establish proper standards for digital asset trading businesses.
"Without appropriate regulations, we risk witnessing significant financial losses for a large portion of the population invested in digital assets."
"While there is no law outright banning cryptocurrencies in Iran, there is also no regulatory framework in place. Laws must be formulated, but if they are developed without input from the private sector, their effectiveness and enforceability will be severely limited."
