US Sanctions On Iran Pushes The Country To Launch Their Own Cryptocurrency

Betraying years of carefully curated foreign policy, the Trump administration has imposed new sanctions on Iran which are set to come into effect on August 6th. These sanctions have put Tehran under a considerable amount of pressure, but they are seeking out help from other countries to circumvent these regulations. Iran’s government has been slapped with a universal prohibition from acquiring US dollar banknotes, amidst other similar sanctions imposed in trade and oil industry.

In times of such grave turmoil, Iran’s modus operandi is to find a way around these harsh regulations, and that they have. Iran is looking to develop its very own cryptocurrency in hopes of dodging the sanctions.

According to local Iranian news sources, the plan to develop a novel cryptocurrency was already on the charts. Back in February, Iran’s Minister of Information and Communications Technology Mohammad Azari Jahromi had spoken to the local media channels and expressed the government’s plan to develop a platform for using cryptocurrency in the country.

The confirmation announcement came in from Alireza Daliri, on behalf of the Directorate for Scientific and Technological Affairs of the Presidential Office. Daliri released a statement to ISNA, a local news agency.

“We are trying to prepare the grounds to use a domestic digital currency in the country…This currency would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions”

This new contradictory stance of the country on virtual currency is clearly one that came out of coercion and exhausted alternatives. Previously the Central Bank of Iran issued a law that prohibited domestic financial institutions from handling virtual currencies. The imposition was justified by citing money-laundering concerns.

“All branches of banks, credit institutions and currency exchanges should stay clear of any sale or purchase of these currencies and avoid undertakings that facilitate or promote such currencies,” read the Central Bank statement.

For Iran to completely go back on their stance is a clear indicator of their dire need to get out of this political quagmire that USA has trapped them into.

When it comes to estimating whether or not Iran has enough resources to build this, we are assured by the administration that the Iranian government would not face much difficulty in the development phase of this digital asset, since it claims to have a pool of knowledge-based companies who know the technology well. The Central bank of Iran has given the go ahead on this and have actually collaborated with companies for the purpose of the project.

As for the technicalities of the procedure, in the next three months, a key is supposed to be introduced into Iran’s banking system which would also bolster the national currency. It would then be put to use as a ‘token’ for settling financial transactions by commercial banks. These self developed tokens would facilitate development of smart contracts based on the properties of the tokens, and it would then expand their required payment services including digital wallets.

A move like this would enable revenue generation in the country and help Iran cope with the sanctions that threaten to strangle their economy.