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Iran contemplating fighting US with Bitcoin

6 November 2017 19:00 (UTC+04:00)
Iran contemplating fighting US with Bitcoin

By Trend

Iran toiled for years to reach a deal with world powers to rid itself of harsh economic sanctions. The talks, which were current in the early 2000s but halted during the Ahmadinejad administration (2005-2013) were resumed by President Hassan Rouhani in 2013 to bear fruit in 2015.

The hopes of Iranians to see a day of free economic ties with the world gradually grew dim after the Joint Comprehensive Plan of Action (JCPOA) proved insufficient in liberating Iran from sanctions.
After the deal’s implementation, world banks and companies remained somewhat hesitant to start business with Iran, fearing a series of US primary sanctions that had been posed to Iran over non-nuclear issues.

According to the Department of Treasury of the United States, "even after Implementation Day (of the JCPOA), foreign financial institutions, including foreign-incorporated subsidiaries of U.S. financial institutions, need to continue to ensure they do not process U.S. dollar-denominated transactions involving Iran through the U.S. financial system or otherwise involve U.S. financial institutions (including their foreign branches), given that U.S. persons continue to be prohibited from exporting goods, services (including financial services), or technology directly or indirectly to Iran…"

The history of U.S. sanctions against Iran dates as far back as 1979, when hostages were held at the U.S. Embassy in Tehran. Over the years, the U.S. government has approved other sanctions. In 2010, amid increasing tensions of Iran's nuclear program, the United States instituted sanctions that U.S. officials described as "unprecedented."

The situation has led Iranian authorities to recently think of replacing the US dollar with other currencies. Iran has already made deals with some business partners to do business in currencies other than the USD.

However, the emergence of Bitcoin and other cryptocurrencies has made the Iranian government upbeat over the prospect of ridding the economy of the sway of the US dollar.
This week, Mahmoud Hashemi Shahroudi, the Chairman of the Expediency Council (a high-ranking body with a say on almost anything in the country), said it is necessary that Iran "removes dollar from foreign trade."

He emphasized that the policy to do so is very "important" and "valuable".

Recently it was reported that the Iranian government plans to implement a new infrastructure for Bitcoin users in Iran.

According to reports, the Iranian government has already researched Bitcoin and its possible benefits for its economy.

Amir Hossein Davaee, Iran’s Deputy Minister of Information and Communication Technology has said "The ministry of communications and information technology has already conducted a number of research studies as part of efforts to prepare the infrastructure to use Bitcoin inside the country."

Moreover, Davaee added that Bitcoin activities include money creation, so the Central Bank of Iran needs to set the ground rules and supervise related activities, otherwise, this would disrupt the economic cycle. Iran is now on the edge of creating a proper infrastructure not only for Bitcoin but also for other cryptocurrencies.

It seems that, as the Iranian government is not able to satisfy all that the US wants from it in order to lift the primary sanctions, it now is going to turn a blind eye on the USD and do business otherwise. Iran may become the winner or the victim in this bet, for it seems it is going to be the first country to bid for cryptocurrencies at such systemic level.

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