Iran Is ‘Preparing Ground’ for State-Backed Cryptocurrency to Dodge Sanctions

state-backed cryptocurrency looms for Iran

According to a local Iranian news channel Press TV, the government of Iran is laying the groundwork for its state-backed cryptocurrency which officials believe will allow Iran to circumvent the sanctions placed on the country by the US since 1979.

The topic of a state-backed cryptocurrency has been on the government’s agenda since April after concerns were raised over whether President Trump would re-impose sanctions.

The announcement was made by Alireza Daliri, the deputy for management and investment affairs of the Directorate for Scientific and Technological Affairs, which had been responsible for the discussions surrounding the prospect of a state-backed cryptocurrency.

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

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.

Currently, the Directorate is working in collaboration with the Central Bank of Iran (CBI) as they take the steps necessary to develop and implement the as yet un-named cryptocurrency.

According to Iranian media, the re-imposition of sanctions on Iran would mean that the republic would be unable to acquire or buy US dollars, a prospect of which threatens the state with an increased level of unemployment, according to CNN.

Countries are moving to State-Backed Cryptocurrency to side-step sanctions

Currently, Venezuela is one of the only countries that has implemented a state-backed cryptocurrency. Since its release in February 2018, the Petro has come under a significant amount of scrutiny from Maduro’s political opposition, who condemned it as illegal.

It has also been roundly criticised internationally, with the Trump administration preventing anyone from within the US participating in its use.

In the past, Russia has also expressed interest in creating what is referred to as the ‘Crypto-Ruble,’ and according to the Director of the Russian Blockchain Association, such a coin may come into effect in ‘mid-2019‘.

The current climate for countries like Russia and Iran mean that they effectively have a choice between adhering to sanctions, which will have a knock-on effect economically or to use cryptocurrency for what was its initial purpose: to circumvent the conventional system and participate in truly decentralized, state-authorized economic activity.

James is a writer for Crypto Disrupt while also working as a content/news freelancer. He’s a firm believer in the positive impact of blockchain and holds a good amount of trust in Ethereum.