According to the latest reports, the Iranian government is censoring cryptocurrency exchanges in the country. An Iranian Bitcoin enthusiast (on condition of anonymity) told the media that every cryptocurrency exchange has been filtered since May this year by the government. Multiple people who were interviewed said that they were unable to access cryptocurrency exchanges like Blockchain, LocalBitcoins and Binance, even after using VPNs as well as other workarounds.
A Country in Crisis
These crypto exchange censorships come just ahead of the planned imposition of sanctions by the US this August, further deepening the crisis the country is going through.
The reason why the Iranian government is blocking access to cryptocurrency exchanges is due to massive inflation in the country, caused by intense political turmoil, both domestically as well as internationally.
The current economic crisis, which has pushed the annual inflation rate up by 127% as of July 2, is pushing the Iranian government to impose strict controls on crypto trading. This is because a large number of people are using cryptos, especially Bitcoin, as a hedge instrument since buying digital currencies is easier that buying dollars on the black market. For many Iranians, Bitcoin’s (and other cryptos’) volatility is nothing compared to how their native fiat currency is behaving right now.
According to the director of the Middle East Institute’s IranObserved Project in Washington DC, considering the tough economic situation in the country, Iranian President Rohani does not want his people to transfer foreign currency – especially precious dollars – outside their country.
Censorship is No Surprise
Many experts believe that this censorship is no surprise; in fact, it’s been a long time coming. There have been indications that the Iranian government would adopt this stance for some time now.
In December 2017, financial institutions were banned by the country’s anti-money laundering agency from transacting with cryptocurrencies such as Bitcoin. Then, in May, the head of the parliamentary economic committee, Mohammed Reza Pourebrahimi issued a warning that cryptocurrency traders could hurt the country’s economy if people continued to leak billions of dollars via international markets in the form of cryptocurrency trading.
Finally, current moves by the government indicate that much stronger controls for censorship are being put in place to prevent any more leakage of dollars out of the country. Imported mining equipment has been banned. The buying and selling of cryptos using Iranian rials has been made illegal. And now users say that some of the biggest cryptocurrency exchanges cannot be accessed any more.
The actions of the government show the deep crisis the country is going through, especially considering the fact that Iran was considered one of the countries that was on the verge of a crypto boom just a few short months ago.