Facing Sanctions, Iran Forges Ahead With State-backed Cryptocurrency Plans
Iran is moving ahead with plans to create a state-backed cryptocurrency for the purpose of evading U.S. sanctions, according to reports from state media. At the same time, more Iranian businesses are also turning to crypto due to U.S.-led sanctions, despite a recent crypto ban in the country.
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Iran Planning to Roll Out Its Own Digital Currency
State-owned media outlet Press TV outlined the details of the official crypto plan, which had been revealed in February, saying that it was now on the agenda of the Directorate for Scientific and Technological Affairs of the Presidential Office.
A spokesman for the Directorate, Alireza Daliri, said that the project would be completed by domestic technology companies in collaboration with the Central Bank of Iran. It is still under development, however, with Daliri saying that there remained work to be done. No deadline was given for when it might go live.
Daliri explained the government’s motivations for adopting an official cryptocurrency:
“We are trying to prepare the grounds to use a domestic digital currency in the country. This currency would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions.”
According to Press TV, the official Iranian news agency IRNA also reported this week that a blockchain network for the nation’s banking system would be introduced within three months. The system will feature a token that can be used by commercial banks to settle financial transactions and make payments. It will have smart contract functionality.
Crypto Seen As a Solution to Economic Woes, Sanctions
The news comes after Iran’s central bank announced in April that it had banned Iranian banks from dealing with digital currencies. That move came after reports that cryptocurrencies had been gaining in popularity among Iranians.
The country has seen the value of its national currency fall to the lowest levels in decades, while the economy has also suffered high levels of inflation. There have also been reports that cryptocurrency exchanges in the country have been censored since May.
It has been three months since U.S. President Donald Trump pulled the U.S. out of an international agreement that saw Iran restrict nuclear weapons development in exchange for the easing of sanctions on the country.
In a reversal, Trump again increased sanctions on Iran as well as any foreign company anywhere in the world that does business with the country. Faced with a renewal of sanctions, it appears that Iran has opted to follow the strategy of two other countries targeted by the U.S. and its allies.
Venezuela also issued a cryptocurrency last winter called the petro, while Russia announced plans last year to create the CryptoRuble, for which it sought the advice of Ethereum creator Vitalik Buterin.
With OPEC countries only selling oil for U.S. dollars, oil producing countries who are at political loggerheads with Washington may be looking for ways to sell their product without using dollar settlement.
China, one of the world’s biggest markets for oil, launched its own challenge to the petrodollar earlier this year when it began trading yuan oil futures in Shanghai, a market that, were it widely adopted, could see the yuan take on increasing importance in international trade.
Have your say. Is sanction-busting a valid use case for cryptocurrency?
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