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In April 2018, the Iranian Central Bank banned banks and nationals from negotiating in foreign cryptocurrency due to money laundering and financial risks.
However, the CBI decided to take a more moderate stance towards digital technology and the blockchain after the imposition of a new round of US sanctions, hoping that digital technology would facilitate international money transfers of Iran. and allow the country to circumvent the sanctions.
Meanwhile, as an oil producer with a petrodollar oil & gas economy, Iran has opted for a plan to use cryptocurrencies and blockchain technology to offset any oil revenues losses due to economic sanctions aimed at reduce oil sales.
Moving on the same path as China, Russia and Venezuela, Iran also hopes that the blockchainization of state-funded actions would lead to the end of the dollar and put an end to the policies of US tyrants.
Under the most severe US sanctions and Iran's blacklist from the international financial messaging system (SWIFT) based in Belgium, the country's plan to create a native cryptocurrency is improving incrementally and thanks to the highly dynamics of cryptocurrency, can act as a good means that Iran must circumvent certain sanctions through untraceable banking transactions.
The CBI has worked with national knowledge-based companies to develop a digital currency, called crypto-rial, supported by the HyperLedger Fabric technology.
As reported, the Informatics Services Corporation, affiliated to the CBI but managed by the private sector, has completed the development of the national cryptocurrency based on the rial and when the CBI approves the uses of the national cryptocurrency, it will be issued by financial institutions such as banks for trial payments and internal and inter-bank payments.
Transactions in virtual currency supported by the state are performed on an online ledger called blockchain, just like Bitcoin, but since the infrastructure is privately owned, it will not be possible for people to extract it.
In fact, Iran is mainly aimed at testing the potential of blockchain and cryptographic technology in managing its financial system, making banks able to use tokens as a means of payment in transactions and bank regulation in the first phase of the blockchain banking infrastructure. The country seems inclined to enjoy the new virtual currency assets that include little notice or fingerprint and has also prepared the necessary infrastructure for cryptocurrency trading in its stock exchange.
However, despite the CBI's prohibition of swapping cryptocurrencies, the Iranians began using cryptocurrency and bitcoin mining for transactions with the rest of the world before its use was banned by the CBI in the country.
Individuals and businesses in Iran have access to virtual currency platforms through "virtual currency exchanges based in Iran and the internet, virtual currency exchanges based in the US or other third countries, and peer-to-peer exchangers" peer (P2P) ", according to reports.
But the US embargo on a number of cryptocurrency trading platforms, including Binance and Bittrex, has restricted Iran to receive services, however, no assets belonging to the Iranians have been blocked. US sanctions have also trapped Iranian bitcoin traders.
Also, in December, the US financial crime network, known as Fincen, issued a notice in an advisory to assist US banks and other financial players such as cryptocurrency trading in identifying "potentially illicit transactions in the Republic. Islamic of Iran ", Bitcoin. com.
Fincen said that since 2013, Iran's use of virtual currency includes at least $ 3.8 million in transactions denominated bitcoins in the year. The organization noted that "while the use of virtual currency in Iran is relatively small, virtual currency is an emerging payment system that can provide potential avenues for individuals and entities to evade sanctions."
Fincen believes that P2P cryptocurrent exchangers are a significant means by which Iran can avoid economic sanctions.
Following the Fincen announcement, US lawmakers introduced a law (HR 7321) to impose more sanctions on Iranian financial institutions and on the development and use of the national digital currency, Cointelegeraph said.
The act prohibits transactions, loans or other transactions related to an Iranian digital currency and introduces sanctions against foreign persons engaged in the sale, supply, holding or transfer of the digital currency.
In the wake of US restrictions, therefore, the cryptocurrency trade is limited to the national market of Iran and is not possible at international level and Bitcoin is sold at a significant premium compared to the global average price in Iran.
Unfortunately, the basic and pre-eminent regulations on the use of cryptocurrencies have not been ratified in Iran and Iranians are obliged to refer to foreign exchange shops to do their own encryption, most of which are obedient. to US regulations and, of course, sanctions.
To ensure that cryptocurrency and blockchain technology are legal and official in the country, the Iranian government is developing a political framework with the help of the CBI and the Stock Exchange Organization that clarifies all its regulations and its cryptocurrency policies and mining activities.
Being legislated, it is believed that SWIFT can be replaced by digital money, that is, the national currency rial-pegged, and transactions would be made faster and at lower prices.
Due to the lack of required regulations, loads of mining cryptocurrency equipment are seized by the customs administration. It is said that they will be released as soon as the government legalizes the use of cryptocurrency in the country.
HJ / MG
