Iran, Russia May Use Cryptocurrency To Avoid US Economic Sanctions

News | May 21, 2018 By:

Mohammad Reza Pourebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs, has suggested that cryptocurrencies be used to bypass US sanctions.

At a meeting with Dmitry Mezentsev, the Chair of the Federation Council Committee on Economic Policy, Pourebrahimi said that cryptocurrencies could provide a way for Iran and Russia to avoid US dollar transactions, and could even be used as a replacement for the SWIFT interbank payment system, a global financial cooperative that enables its members – financial institutions – to settle high-value transfers across borders.

“Over the past year or two, there has been lots of talks about the use of cryptocurrency,” said Pourebrahimi. “It is one of the good ways to bypass the use of the US dollar, as well as to replace the SWIFT system. We ordered the Central Bank in Iran to start developing proposals on the use of cryptocurrency.”

Pourebrahimi said he discussed this issue with the representatives of the Russian State Duma economic policy committee, and they shared his opinion.

“They share our opinion, we said that if we manage to promote this work, then we will be the first countries that use the cryptocurrency in the exchange of goods,” Pourebrahimi said.

For his part, Mezentsev noted the importance of developing inter-bank relations between Russia and Iran. He suggested that an inter-bank settlement system connecting the two countries would expand the markets for Russia’s card-based payment system, Mir, created in response to Visa and MasterCard cutting ties with some Russian banks following a 2014 round of US sanctions, and Iran’s Shetab payment system.

Mezentsev added that the discussion of this issue will continue at the meeting of the working group on financial and inter-bank cooperation, which will be held in Tehran on July 5.

Earlier this month, Pourebrahimi reported that without access to the international banking system, Iranian citizens have so far succeeded in siphoning more than $2.5 billion out of the country in cryptocurrency.