Iran is considering the use of cryptocurrencies in order to avoid the looming US sanctions and end the US Dollar hegemony.
In a short interview for the Mizan Online news agency, Mohammad Reza Pour-Ebrahimi, chairman of the Iranian Parliament’s Economic Commission, said lawmakers were looking into these options and the matter might be soon discussed in parliament.
Pour-Ebrahimi noted that digital currencies can serve as an important way to evade the US sanctions and get rid of the dollar’s hegemony, in addition to bilateral or multilateral trade agreements.
"The capacity of digital currencies is one of the issues that can be discussed in the monetary dealings of the state aid commissioner, which will be examined by the Economic Commission," Pour-Ebrahimi said, adding that nowadays many countries like Russia, China and Brazil are already exploring similar options.
According to Pour-Ebrahimi, one of the main priorities of Iranian lawmakers is to explore the possibilities provided by smart contracts amid the current economic turmoil and high inflation in the country.
Iran has had a love-hate relationship with cryptocurrencies. Last autumn, its High Council of Cyberspace expressed a positive opinion towards accepting Bitcoin as part of the economy, but demanded that it should be regulated first.
The accelerating inflation in recent months prompted Iranians to increase their interest in digital currencies, buying $2.5 billion worth of cryptos, according to some estimates. This led to a government crackdown, allegedly blocking the access to the websites of foreign cryptocurrency exchanges. A couple of weeks earlier, the central bank banned cryptocurrency trading due to concerns about money laundering.
On the other hand, there have been reports that Iran’s government has been exploring the possibility of issuing a centralized digital currency. Iran would not be the first country to try to circumvent international sanctions by issuing its own coin. Venezuela already did so with the Petro, even though it is somewhat questionable how successful it is.
The Iran nuclear deal was reached in 2015 and as a result the international economic sanctions against the country were lifted. However, earlier this year US president Donald Trump scrapped the deal. The new US sanctions are rolling out over the next few months, to come in full effect this autumn.
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