Banks and Cryptocurrencies Global Evaluation: The Middle East

As many advocate to replace the U.S. dollar as the global reserve currency, Bitcoin and nationalized cryptocurrencies may finally offer Muslim countries economic stability and leeway in Western politics.

Just as Venezuela launched its own cryptocurrency to circumvent U.S. sanctions, other oil-producing countries have hinted at abandoning the PetroDollar system that has been operating in the Middle East for over 40 years - threatening the global supremacy of the U.S. dollar.

The following assessment of cryptocurrency regulation in the Middle East is a part of a larger series of pieces evaluating regulation of the flourishing global fintech industry.

The Iranian government seemingly held positive views toward Bitcoin when the Iranian cyberspace authority - the High Council of Cyberspace - first announced plans last year to collaborate with the Central Bank of Iran to publish a report on cryptocurrencies.

The central bank has since issued a statement claiming it never recognized Bitcoin as a legal tender, and banned domestic banks and other financial institutions from dealing with cryptocurrencies in April.

The Iranian Information and Communications Technology minister stated the ban on cryptocurrencies does not preclude the central bank from developing a domestic cryptocurrency, and that an experimental model of a state-issued digital currency was ready.

The ban on cryptocurrencies preceded U.S. sanctions imposed on Iran in May, and is seen as an attempt to protect the country's struggling financial institutions and depreciating national currency.

TurkeyTurkish authorities have sent mixed signals to the cryptocurrency industry in the past, but are following the lead of other Middle Eastern countries with plans to release a national cryptocurrency.

The Turkish government took a harsh stance on Bitcoin last November, when lawmakers of the Directorate of Religious Affairs stated cryptocurrencies were "Not compatible" with Islam because of the speculative nature of the market and lack of government control.

Although cryptocurrencies are far from mainstream adoption, a number of Turkish businesses and real estate companies accept Bitcoin as payment.