Business 17 July 2018

Dennis Wafula

Iran may turn to cryptocurrency to avoid US sanctions: report​

Like Venezuela, Iran is also considering adopting cryptocurrencies to combat the upcoming U.S. sanctions, according to reports. This new development comes a few months after the UnitedStates backed out of the nuclear deal with Iran. According to local reports, authorities in Iran are working on a way out before the sanctions take effect. While speaking in an interview with local reporters, the chairman of the parliamentary Economic Commission, Mohammad Reza Pour-Ebrahimi, stated that cryptocurrency may turn out to be the solution to the impending crisis.

When the U.S. government pulled out of the nuclear deal with Iran in May, it also threatened Teheran that it would take up harsh measures against Iran. The rising tension has caused the rial, Iran’s national currency, to lose half its value in the last few months. The imposed economic sanctions by the world’s economic giant will take effect in November.

Iran’s relationship with cryptocurrencies has not always been rosy. Since the introduction of Bitcoin in 2009, the country has had mixed attitudes towards digital currencies. Earlier this year, the country faced protests over the social-economic situation in the country. The high inflation necessitated many Iranians to opt for cryptocurrencies in a measure to counter the resultant high cost of living in the country. During this period, citizens were encouraged to adopt cryptocurrencies in the country.

The Iranian government, skeptical about crypto trading, banned the activity in April. Local banks and other financial institutions were barred from conducting crypto transactions, resulting in its citizens resorting to other methods to acquire cryptos. Reports revealed that Iranians spent more than $2.5 million in overseas crypto purchases a month after the ban.

Despite this, Iranian authorities haven’t totally written off cryptocurrency. According to reports, the Iranian government has been actively steps to create a legal framework for the domestic cryptocurrency market. Iran has also been working to develop its own cryptocurrency.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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