Iran to Skirt American Sanctions with Cryptocurrencies

July 20, 2018

Cryptocurrency may become one of the main ways to skirt US sanctions for the Islamic Republic. As the chairman of the Iranian parliament’s economic commission Mohammad Reza Pour-Ebrahimi stated, cryptocurrencies may remove USD hegemony in international trade relations. When speaking in the interview he claimed this issue is to be reviewed in the parliament.

Mohammad Reza Pour-Ebrahimi also stressed that the Iranian parliament’s major objectives in the current economic situation will include currency contracts between countries which would both facilitate trade operations and help to fight against the sanctions.

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

Amid strained relations between Teheran and Washington caused by the US quitting the nuclear deal in May 2018 and tightening policies against Iran, the country’s national currency, the rial, has devaluated twice over the last months. Imposing new sanctions for Iran is expected in November this year, so the authorities are seeking ways to skirt them.

Until now Iran was quite skeptical about cryptocurrencies. But economic troubles have convinced many citizens to resort to it, primarily to protect their capital from high inflation and their future from economic uncertainty. While Iran was hit by the tide of public protests due to poor social economic situation, the country saw surprisingly high demand for Bitcoin (BTC).

As it was reported later, Iran studied ways to create its own cryptocurrency and legal regulation. Claims followed it that coins cannot be relied upon and too risky and the country’s Central Bank tried to prevent using cryptocurrencies in the country.

In April the Bank published a statement which actually prohibited local banks and other financial institutions being engaged in cryptocurrency matters. The discussion on how the environment must be regulated are still open. The reasons against cryptocurrencies included risks of money laundering as well as financing terrorism and criminal activities.

But in May 2018 the Iranians acquired cryptocurrency for over 2.5 billion dollars. In addition, the country has created a trial cryptocurrency while the Central Bank together with the Information and Communications Ministry are elaborating legal framework for cryptocurrency.

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