National Cryptocurrency Planned By Iran To Evade US Sanctions

Blockchain, News | July 27, 2018 By:

The government of Iran has confirmed that it will create its own state-issued cryptocurrency to bypass incoming US sanctions.

According to Iran’s Press TV, the government’s Science and Technology Department has already included the creation of a national cryptocurrency in its agenda. Alireza Daliri, the department’s deputy for management and investment, said that they are already working with the central bank of Iran to develop the cryptocurrency.

“We are trying to prepare the grounds to use a domestic digital currency in the country,” Daliri said. “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.”

Daliri added that the state-issued cryptocurrency would back and tokenize Iran’s national fiat currency, the rial. It will also be used to settle interbank settlements in financial transactions between banks domestically alongside its intended use for cross-border transactions without any reliance on the SWIFT-led global financial system.

The US sanctions, which will go into effect next month, include sanctions on the acquisition of US dollar banknotes by Iran’s government, sanctions on its trade in gold and other precious metals, sanctions on sales and transfer of aluminum, steel, coal, and graphite, and sanctions on the country’s automotive sector.

Daliri also said that the government is looking to integrate blockchain technology within the domestic banking system over the next three months, wherein the cryptocurrency will facilitate financial transactions among commercial banks connected together on a decentralized ledger.

The move by Iran to create its own cryptocurrency resembles similar initiative by Venezuelan President Nicolas Maduro, who earlier this year launched an oil-backed cryptocurrency, called Petro, that became the world’s first state crypto. Petro was created to enable the country to advance in monetary sovereignty and carry out its transactions to overcome the financial blockade, led the by the Trump administration.