Iran’s central bank recently rejected reports stating it was fond of bitcoin and other cryptocurrencies as “baseless” and revealed that it is currently working on its own cryptocurrency.

According to local independent news outlet Iran Front Page, the Central Bank of Iran sees cryptocurrencies like bitcoin as too volatile and too risky to rely on them. Last year, various reports claimed the country was adopting bitcoin as it was cut off from the global SWIFT network.

The idea that Iran was facilitating and encouraging bitcoin use in the country is seemingly false. A central bank spokesperson reportedly stated:

“The wild fluctuations of the digital currencies along with competitive business activities underway via network marketing and pyramid scheme have made the market of these currencies highly unreliable and risky.”

Central Bank of Iran

In fact, the central bank issued a warning on the high risks involved with cryptocurrency investments. Given the volatile market, the central bank argued that citizens who invest “may lose their financial assets.”

Iran Front Page’s report also claims the central bank is currently cooperating with institutions to develop a mechanism to “control and prevent digital currencies in Iran,” potentially meaning the country may soon crackdown on their use.

Iran’s technology minister, Mohammad-Javad Azari Jahromi, revealed that the government is working on a “locally-developed cryptocurrency” that still needs to be tested by the ministry. The cryptocurrency may be similar to Venezuela’s Petro, which was issued to help the country raise funds and bypass US sanctions. The Petro is supposedly backed by the country’s oil reserves.

Iran is currently dealing with harsh sanctions. The country is mostly cut off from major international payment networks, including Visa and Mastercard. Services like PayPal aren’t available in the country, which makes cryptocurrency like bitcoin an attractive alternative.

Cryptocurrencies, however, are seemingly not that popular in Iran. According to CryptoCompare, the Iranian Rial makes up for less than 0.01% of bitcoin’s trading volume, as the equivalent of little over $40,000 was exchanged on LocalBitcoins in the last 24-hour period.