Iran and India ban Cryptocurrencies

Iran’s central bank has banned Iranian banks, credit institutions and currency exchanges from selling or purchasing digital currencies. It says cryptocurrencies, like Bitcoin, are used in money-laundering and financing terrorism, and that they are inherently unreliable and risky.

The same concerns are expressed widely around the world, including by the Chief of the International Monetary Fund, but many also believe digital currencies and the technology behind them could have a positive effect as a low-cost payment method.

Iran’s actions follow similar decisions by other central banks, such as the Reserve Bank of India’s decision in April to serve three months’ notice for entities they regulate to cease dealing in digital currencies.

The central bank decisions have been concerning for digital currency users in these countries (reportedly around five million in India), but it is too early to say whether these actions will last, have any long-term impact on the wider cryptocurrency market or whether other countries will follow suit.

Some countries are debating the regulation of digital currencies: Japan has recently created a regulatory body for its cryptocurrency exchanges, for example, and others have considered creating their own state-backed digital currencies.

The future of digital currencies is still unknown, which is a major contributing factor to their price volatility, but they are likely to be with us for the foreseeable future.