Iran are reputedly on the verge of completing the development of a state-owned digital currency, despite the Iranian Central Bank’s recent ban on cryptocurrencies. An Iranian government minister confirmed at the weekend that an experimental model of a domestic digital currency is now ready, ironically hot on the heels of Iran’s recent banking blockade on cryptocurrency trading.
The Iranian government’s Information and Communications Technology (ICT) Minister Mohammad Javad Azari-Jahromi was recently quoted by Iran’s state news agency IRNA as saying:
“The central bank’s ban does not mean the prohibition or restriction of the use of the digital currency in domestic development. Last week, at a joint meeting to review the progress of the (domestic cryptocurrency) project, it was announced that the experimental model was ready.”
Back in February, Azari-Jahromi – Iran’s youngest minister – said in a Tweet that his ministry had been working with local experts on an experimental cryptocurrency which was ready to be presented for review and possible approval. Fast forward three months, and it would seem that Iran’s cryptocurrency is in fact “Good To Go.”
What Is Iran’s Stance On Cryptocurrency?
Just last week, Iran’s Central Bank prohibited local branches from dealing in cryptocurrencies like Bitcoin, Ripple and Ethereum, due to concerns over possible money-laundering. Quoting from an Iran Central Bank circular on cryptocurrencies that was passed by Iran’s anti-money laundering body in December, Iran’s state news agency said:
“Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them.”
Iran is desperate to avert a currency crisis should the country once again be hit with crippling sanctions, as they were prior to the ”Iran Nuclear Framework Deal” of 2015. Speculation is rife that president Donald Trump is keen to withdraw from the 2015 deal the US, China and Europe made with Iran, and will use any excuse to do so.
In fact, Trump may already have his excuse; earlier today (Tuesday May 1) Israeli president Benjamin Netanyahu went public with “half a ton” of stolen documentation which – according to Netanyahu – was obtained by Mossad and proved that Iran had never actually stopped working on their nuclear program, which is a clear violation of their part of the 2015 agreement.
In April Iran formally unified its official and open market exchange rates. It also banned the exchange of money outside of banks. This followed the news that Iran’s national currency, the Rial, had plunged to an all-time low, amid growing concerns about the imminent return of heavy sanctions from the West.
What Benefits Will Iran’s Digital Currency Bring?
In the eyes of the US, Iran’s introduction of its own cryptocurrency is the same as Venezuela’s recent introduction of its “Petro” crypto, which has already pumped over $1 billion into Venezuela’s devastated economy. As early as February of this year, CNBC were putting out trashy headlines like:
“Iran becomes latest rogue state to develop its own cryptocurrency”
Thus far, Venezuela’s Petro has only benefited a country whose national currency is virtually worthless. Will Iran benefit similarly should the threat of heavy sanctions become reality? Certainly, a cryptocurrency that is backed up by a rock-solid source of wealth (Iran, like Venezuela, is oil rich) is certainly a way of bypassing financial blockades and continuing to trade when a nation’s fiat currency is worthless (Venezuela’s Bolivar) or undesirable (Iran’s Rial).
If Iran does indeed get hit by severe sanctions that continue for months and even years, it could well be cryptocurrencies, both in the national cyber coin, plus established names like Bitcoin and Ethereum, which allow Iranians – from high powered business people to ordinary families, to go about their day-to-day lives a little easier.