Central bank bans online gold trading by banks in Iran

Iran’s central bank has banned credit institutions from offering online gold trading, citing money-laundering risks and warning that institutions continuing the activity could face supervisory and disciplinary action.

At one online bank in the country, customers who previously bought gold can still sell their holdings, but the option to buy more has been disabled. The bank has not been named.

In circular No. 175671, dated Oct. 5, the central bank said some credit institutions had enabled online gold buying and selling in conflict with its objectives and policies. It said those services could undermine its control and oversight measures.

The regulator warned that the rapid conversion of funds denominated in rials, Iran’s currency, into gold could allow the origin of money to be concealed. It highlighted repeated, small transactions made over short periods.

Low minimum purchase amounts and the ability to make multiple trades could also increase the risk of structuring, the central bank said. This involves breaking transactions into smaller amounts to evade anti-money-laundering controls.

The circular’s stated prohibition covers credit institutions. The continued ability to sell existing holdings at the unnamed online bank describes the service available to its customers; it does not establish a general exemption from the ban.

Related reading: Earlier reporting on licensing delays for online gold platforms.