According to ILNA; the government of Iran is preparing to launch its own cryptocurrency. Iran and Russia could turn to cryptocurrency as a solution to evade Western financial sanctions and reduce their dependence on the US dollar.
Iran’s minister of Information and Communications Technology announced the test model for a digital currency is currently under development.
Iran started developing a local cryptocurrency in 2017, echoing moves by the similarly sanctioned country Venezuela, who released the state-issued “Petro” earlier this year.
The country has presented a national digital currency development plan to bypass US sanctions. Russia has helped the Venezuelan crypto project before and is now showing interest in Iran’s proposal to develop a digital currency.
Washington pulled out from the nuclear deal in May and threatened Teheran with harsher measures. Amidst the struggle with US sanctions, Iran’s national fiat currency has lost half of its value in the past several months. With rial currency problems, Iran’s government is turning toward the cyber world to help evade U.S. sanctions that will further tighten the economic screws on Tehran. The new set of economic sanctions is expected to take effect in November.
A global financial transaction system can help Iranian banks resist sanctions
Many sanctioned countries may see cryptocurrencies as a potential replacement for traditional international banking systems like SWIFT. Iran and Russia could use digital currencies to avoid U.S. dollar transactions and potentially even replace the SWIFT interbank payment system.
Although the lifting of banking sanctions was one of the motives for Iran to sit behind the negotiating table, it did not save Iran’s economy. On the other hand, the crypto market has attracted more Iranians to buy and store bitcoin.
The Iranian government is trying to launch its own cryptocurrency. This appears to be an attempt to defy Us sanctions while trying to take hold of the quick growth of Bitcoin in Iran.
The Central Bank of Iran (CBI) begun its academic research on blockchain technology in 2017.
In July, the Ministry of Science signed an agreement to work with the Central Bank on digital currency technology. A few weeks later, the Communications minister signed a letter of agreement with the National Library to use blockchain’s capacity for recordkeeping. This indicates that Iran is clearly developing a digital currency.