Iran may be planning to use cryptocurrencies to evade new sanctions from the United States according to Mohammad Reza Pour-Ebrahimi, Chairman of the country’s Parliamentary Economic Commission. The lawmaker also notes that cryptocurrencies could help in eliminating the US dollar in the international trade. Pour-Ebrahimi says a decision will be made in the parliament of the Islamic Republic before the end of August.
Pour-Ebrahimi added that the main objectives of the Iranian Parliament were to explore the issue of money treaties since it would help reduce sanctions as well as curb the current volatile economic situation in the country. He says that, “Today, many countries like Russia, China and Brazil have already turned to mutual or multi-national money treaties which facilitate trade transactions.”
In May, Washington pulled out of a nuclear deal which is creating tensions between the two countries. Since then, Iran’s national currency has lost more than half of its value. Many expect the drop to continue since US economic sanctions will take effect in November. The Iranian government is working hard looking for ways to avoid the sanctions.
The high inflation in the country is seeing many of its citizens turn to Bitcoin in an effort to protect their wealth in the economic uncertainty. In January, Iran recorded a record peer-to-peer transaction between Rial and Bitcoin. During the same period, reports emerged that Iran was planning to issue its own digital currency. These reports did not last long when economic experts questioned the reliability of the currencies. This was followed by another rumor that the Central Bank of Iran was planning to ban digital currencies in the country.
The Central Bank of Iran notes that cryptocurrencies have associations with terrorism financing, money laundering and other criminal activities. Due to this, they believe it would not be healthy for the nation. However, the threat did not prevent Iranians from buying digital currencies. In May, it was revealed that Iranians sent more than $2.5 billion abroad to buy digital currencies.
Further reports are emerging that Iran has already developed an experimental local cryptocurrency and that the country’s regulatory bodies are creating a legal framework to regulate digital currencies instead of banning them. Iran could be following in the footsteps of Venezuela who created its own digital currency called the Petro to avoid US sanctions.