Digital Economy Activists Warn of Repeating Past Failures in New Parliamentary Support Plan

Iran’s new parliamentary plan to support digital economy businesses promises regulatory transparency and an end to sudden restrictions in some areas, yet faces familiar deadlocks in others. Digital economy activists argue that despite its positive intentions, several approaches in the plan resemble past failed initiatives rather than offering effective solutions.

The “Plan to Remove Barriers and Develop the Digital Economy” is being pursued by members of Parliament’s Economic Commission, with its general framework approved last week. The plan covers a wide range of sectors within the digital economy, from fintech and digital health to facilitating the public listing of digital businesses.

Regulatory Clarity for Insurtechs, With Caveats

In recent years, insurtech companies have operated under significant regulatory ambiguity. The new plan appears to signal a turning point. Article 9 of the bill explicitly obliges the Central Insurance Authority to draft and publish clear technical regulations for digital insurance platforms within six months.

This requirement, combined with a ban on imposing overlapping regulations, reflects a decisive shift by lawmakers from restrictive oversight toward facilitating innovation. If implemented effectively, it could help stabilize, grow, and enhance the competitiveness of Iran’s digital insurance sector.

Ali Elyasi, Deputy CEO of Azki, told Digiato that Article 9 and its accompanying clauses are among the most important provisions of the bill for the future of Iran’s digital economy.

“These provisions are crucial for sectors like insurtech that have long been caught between innovation and regulatory uncertainty,” Elyasi said. “They send several clear messages. First, supervisory bodies, including the Central Insurance Authority, are required to publish technical regulations within a defined timeframe. This creates regulatory transparency and moves us away from the gray areas that dominated past years. For a business like Azki, which depends on stability and predictability, this transparency is both positive and necessary.”

Elyasi added that Clause 1 of Article 9 helps keep the door open for innovation. “If a new service or product is not yet defined in traditional regulations, digital businesses are allowed to continue operating until new rules are established. This is vital for insurtechs, because innovation is the core of this industry, and regulation should support it rather than halt it.”

He described Clause 2 as the most significant shift in approach. “For the first time, a mechanism has been introduced to prevent regulators from disrupting digital platforms through sudden restrictions or duplicate regulations. The possibility of disciplinary action against responsible officials for unlawful restrictions or delays in drafting regulations clearly signals a change in legislative mindset.”

However, Elyasi warned that risks remain. “The biggest risk is the quality of the regulations drafted during this six-month period. These rules will shape the future of the ecosystem. Overly restrictive regulations could slow or even stop innovation, a pattern the Iranian innovation ecosystem has unfortunately experienced before. Still, the law is designed to limit arbitrary rulemaking and keeps corrective mechanisms such as the Administrative Justice Court active.”

If properly implemented, Elyasi believes the law could foster cooperation between regulators and businesses, establish clear regulatory language, and promote collaborative regulation. “With genuine private sector participation, this process could lead to insurtech growth, improved service quality, and healthier competition in the insurance industry.”

Electronic Prescriptions Dominated by Base Insurers

Another section of the plan addresses digital health systems and electronic prescriptions. Under the bill, all basic and supplementary insurance funds are required to enable electronic prescription registration and access to health records through licensed private-sector platforms that meet defined standards.

In practice, however, the plan faces parallel actions by base insurers. These institutions currently operate proprietary prescription systems and often fail to provide timely, high-quality web services to private platforms. This has tilted competition in favor of insurer-owned platforms.

As a result, digital health businesses, which are expected to drive transformation, continue to face serious limitations in accessing data and participating fully in the prescription process.

Mehdi Khodadadi, Head of the Digital Health Commission at Nasr Tehran, told Digiato that while electronic prescriptions are technically possible through platforms, the real challenge lies elsewhere.

“The main issue begins where base insurers operate their own prescription systems,” he said. “Today, physicians mostly write prescriptions through insurers’ dedicated platforms, which creates a major challenge for private-sector businesses.”

Khodadadi noted that physician access to electronic health records is a clear legal obligation under Article 38 of the Seventh Development Plan. “The real problem is prescriptions. Base insurers not only have exclusive systems but also access to web services and capabilities that are either unavailable to private platforms or provided with delays and poor quality. Even the support for existing APIs is problematic, pushing many doctors toward insurer-owned platforms.”

He emphasized that insurers must abandon parallel prescription systems. “The solution is clear. Insurers need to significantly improve the quality and support of APIs provided to the private sector. Only then can platforms play a meaningful role. Currently, a large share of prescriptions is still written on insurer-owned platforms, leaving private companies with a limited market share.”

Khodadadi also highlighted long-standing challenges in electronic health records. “For years, vast amounts of health data have been collected by the Ministry of Health, but the infrastructure for effective use is lacking. Priority should be given to defining how data is collected, managed, and used based on a clear e-health roadmap, so it can be transparently organized and made available to service providers.”

He concluded that despite their potential role as drivers of transformation, digital health businesses still lack a clear legal position and meaningful participation in policymaking. Strengthening their role, increasing trust, and defining a clear legal framework could accelerate progress.

Facilitating Stock Market Listings or Avoiding the Real Problem?

Another key provision of the plan focuses on easing the public listing of digital economy companies. Entering the stock market has long been a major bottleneck for digital businesses, many of which struggle with financing due to rigid listing requirements and the valuation of intangible assets.

Under the plan, the Ministry of Communications, in cooperation with the Securities and Exchange Organization, is tasked with facilitating the creation of a specialized capital market for the digital economy.

However, industry activists argue that such solutions repeat earlier failed experiments rather than addressing the root problem.

Rooein Samadzadeh, a financial market activist and former investment director at Tapsi, told Digiato that reinventing the wheel is unnecessary. “We should look at leading global markets and see whether such models exist. In markets like the US, startups are listed alongside companies worth hundreds of billions of dollars, without restrictive frameworks. Any form of limitation ultimately moves us away from the real objective.”

He added that domestic experience shows repeated failure. “From the ‘target market’ in Farabourse to the Novafarin market and even restrictions on investor types during Tapsi’s IPO, these approaches have consistently led to dead ends. They have been attempts to mask the problem rather than solve it, and they ultimately failed.”

According to Samadzadeh, regulators are trying to avoid accepting the inherent risk of digital companies and potential investor backlash. At the same time, investors have grown accustomed to shifting responsibility for their decisions onto regulators.

“Risk and return grow together,” he said. “Unless this principle is stated clearly, risk responsibility is properly assigned to investors, and regulators accept basic capital market realities, we will continue to see new plans and labels every management cycle without addressing the root issue.”

Legal Ambiguity in Judicial Protection for Digital Businesses

Another section of the plan requires executive bodies, the judiciary, and state media to obtain case-by-case approval from higher legal authorities before filing legal or judicial claims against licensed digital businesses. Courts would also be required to verify such approval.

While the goal is to reduce hasty lawsuits and provide stability for platforms, legal experts question whether the provision is enforceable.

Mahshid Asadi-Nia, a legal advisor in emerging technologies, told Digiato that although the requirement could theoretically prevent unsubstantiated claims, it faces serious implementation challenges.

“In practice, this provision limits the right of institutions to file claims and could face legal objections or fail to be fully implemented,” she said. “Especially since the approval process would need to be fast, transparent, and efficient, which past experience does not support.”

Asadi-Nia noted that if implemented correctly, the mechanism could reduce legal risk, prevent baseless complaints, and create greater stability for digital businesses. In reality, however, its enforceability remains uncertain, even though its potential protective impact is significant.