Superficial Consultation: Why the Central Bank Ignored Cryptocurrency Ecosystem Criticism?

Iran's Central Bank has officially approved the "Guidelines for Establishment, Operation, Dissolution, and Oversight of Crypto Brokers." While this document was intended to be finalized through consultation with private sector stakeholders, fintech and cryptocurrency experts argue that it suffers from multiple technical and operational flaws. They warn that neglecting private sector input could cast uncertainty over the future of this industry.

Disregard for Private Sector Recommendations

Saleh Khajeh-Dalouei, Vice President of the Cryptocurrency Commission at the Fintech Association, had previously raised concerns about the draft version of these guidelines. In light of recent developments, he shared his thoughts on the finalized document.

In an interview with Digiato, Khajeh-Dalouei criticized the approval process for the crypto exchange guidelines. He stated: "Unfortunately, during the drafting and approval stages, recommendations from associations and private sector stakeholders were not effectively considered. Despite specialized associations like Fintech and Blockchain submitting formal letters with detailed expert analyses outlining potential risks in this draft to the Central Bank, only superficial changes were made in the final version."

Khajeh-Dalouei noted that while minor amendments, such as changing company types from partnership to private joint-stock companies or adjusting deposit requirements, might appear beneficial on the surface, they fail to address fundamental concerns within the guidelines.

He further explained that while industry organizations were preparing their expert analyses and documentation, the finalized guidelines were simultaneously rushed through approval by the Central Bank's Supreme Council: "This approach not only undermines meaningful private sector participation but could also lead to significant challenges in implementing this document moving forward."

Misalignment with Market Realities

Other experts have also pointed out discrepancies between certain provisions in these guidelines and practical market conditions. Iman Maleka, Secretary of the Fintech Association, told Digiato: "Despite minor revisions in the final version of the 'Guidelines for Establishment, Operation, Dissolution, and Oversight of Crypto Brokers,' several clauses remain impractical for private-sector platforms due to their misalignment with market realities."

Maleka elaborated: "For instance, requiring platforms to register as partnerships or private joint-stock companies is unfeasible for large enterprises. In a partnership structure, individuals must personally guarantee substantial financial amounts, a condition that's unrealistic for major firms. The Central Bank needs to rethink this framework and develop more adaptable mechanisms suitable for varying platform sizes."

He also highlighted another contentious issue, the blanket prohibition on certain banking services for crypto platforms, which he argued stifles innovation.

Additionally, Maleka raised concerns about centralized licensing processes: "Given international circumstances and sanctions-related constraints, concentrating licensing authority within the Central Bank heightens operational risks. A better approach would separate licensing responsibilities from oversight functions—for example, akin to ride-hailing services where regulatory oversight rests with government agencies but licensing is managed by private entities."

Maleka warned that excessive pressure on domestic platforms could drive users toward foreign services or untraceable channels like Telegram, an outcome contrary to policymakers' objectives: "This guideline urgently requires revision because its current form poses significant obstacles to practical implementation."