Iran: Cryptocurrencies Could Be A Way To Circumvent U.S. Sanctions

Iran: Cryptocurrencies Could Be A Way To Circumvent U.S. Sanctions

by 31. August 2018

A High Representative of the Iranian government has once again expressed how cryptocurrency could play a vital and major role for the country’s economy.

It gradually seems that Iran is at all costs seeking an alternative to the current and future economic pressures from the United States.

Trump’s Iran Sanctions

At the beginning of the summer, this Islamic republic drew special worldwide attention; Tehran regime was in the spotlight. Not only crypto enthusiasts were keenly scrutinizing what was happening, but rather a vast majority of countries having their businesses and companies established in the Persian Gulf.

Donald Trump’s ruthlessness on the country appears to be without limits. In July, the U.S. stated in a NBC interview that the appeal from Britain, France and Germany granting exemptions to several Europeans firms to operate in Iran has been declined. Officials declared that future sanctions will have “unprecedented” economic pressure on the Hassan Rouhani’s country.

To fight against those “unprecedented” economic pressures, Iran considers using cryptocurrencies to evade U.S. sanctions says a senior official of the Iranian government in an interview.

Chairman of the parliamentary Economic Commission, Mohammad Reza Pour-Ebrahimi, pointed down that cryptocurrency could be an alternative and a solution to get rid of the dollar hegemony. In that regards, those exact same words were previously mentioned  by Ken Jacobs, Lazard CEO in a Bloomberg interview. In a discussion with the Mizan News Agency, an Iranian press media, Pour-Ebrahimi argued this likelihood will soon be reviewed in the parliament later on this year.

“Today, many countries like Russia, China and Brazil have already turned to mutual or multi-national money treaties which facilitate trade transactions,”

he commented.

For the past few months, the Iranian rial had plunged to new lows as U.S. sanctions loom; the currency faced a strong devaluation against USD and lost more than 50% of its value as depicted below. The new economic sanctions wave is expected to come into effect in November. It is thus undebatable that Iranian authorities are trying to bypass them by any means.

USD:IRR

Sources: Yahoo Finance

Bitcoin in Iran

Until today, Iran had an ambiguous relationship with cryptocurrencies in general. The country’s economic difficulties have shown the population that finding new solutions, such as Bitcoin for instance, could be an alternative to protect the money they own against high inflation and economic uncertainty. Earlier this year, data indicate a sharp increase in trade between Iranian rial and Bitcoin when the country was shaken by a wave of protests over the country’s socio-economic situation.

During last spring, Iran’s central bank decided to ban the country’s banks from dealing in cryptocurrencies due to AML concerns. Back then, the state news agency IRNA declared:

“Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them.”

 

Featured image via Pexels

 

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