Irna is not a country most people would think of when it comes to fintech and innovation. But the Iranian Central Bank wants to launch a new regulatory body specifically servicing fintech firms. Regulating his innovative financial area has been the bank’s priority over the past year, and it is time to make everything official. Creating a balanced ecosystem allows for innovation and competition, which is what the country needs right now.
Iran Keeps Its Eye On Fintech Regulation
Similarly to how Bitcoin regulation works, creating a legal framework for the fintech sector is anything but straightforward these days. The Central Bank of Iran has been working on establishing such an ecosystem for over a year now, and they want to authorize the operation of financial startups in the region. Lowering the risks and barriers to entry for both entrepreneurs and innovators is of the utmost importance.
It is true existing regulation will not apply to fintech startups and entrepreneurs. Or to be more precise, the existing legal framework is inefficient in accommodating the fast-paced changes brought to the table by the fintech sector. Creating a whole new body to allow for innovation in the financial space seems like a good idea, yet it remains to be seen what it will entail exactly.
Under the current regulatory framework, fintech company can work without oversight, as long as they are not involved in money creation, currency exchange, handling deposits, or offering payment tools. Unfortunately, his leaves out a lot of startups from succeeding in Iran right now, as most fintechs focus on those areas specifically.
Depending on which source one checks, it appears there are several dozen fintech startups active in Iran already. That is quite a surprising number, as hardly anyone ever hears anything about finances in Iran. What is interesting to note is how all of these companies were founded in the past three years
It has to be said, the approval of his new fintech framework will take some time. The Office of Vice President For Science and Technology Affairs has drafted the new regulation, which will them be sent the Central Bank of Iran. They will review the proposal by December 21st, after which it will be sent to the government. Depending on their approval, the framework will be reviewed and passed in a Cabinet meeting next year. An excellent example of how administration and politics can slow down innovation before even passing a legal framework.
For now, it is unclear what his means for Bitcoin, although it is believed this will be a positive development. Cryptocurrency exchanges would not be allowed to operate under the current framework, as they are involved in providing financial services. But once the new regulation is in place, that situation could change rather quickly.
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