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With real-world problems triggering a "spiral of death" for the rial currency, the Iranian government is turning to cyberworld to help beat US sanctions that will further strengthen the economic lives on Tehran.
The U.S. measures which entered into force on August 7, four months after US President Donald Trump withdrew the Iranian nuclear deal, aimed at cutting Tehran's access to US dollars and stifling the trade in major Iranian industries, including cars, airplanes and Persian carpets
The dirty street protests against the economic problems of Iran have put a human face on those and other challenges facing the religious leadership of that country.
So with the currency and economic fears among the general population becoming more palpable by the day, the Iranian government tried to stifle the anger triggered by the White House decision to abandon the 2015 nuclear deal by fighting for to stem the fall of the rial.
The creation of a cryptocurrency could be a way to alleviate pain.
blockchain technology used in digital currencies eliminates the need for a third party, allowing transactions to be made quickly, irrevocably and in a secure environment. [19659002] Abolhassan Firouzabadi, secretary of the Supreme Council of Iranian Cyberspace, said last week that a working group will be formed to discuss the launch of a virtual currency and that "we are also planning to develop a national and joint cryptocurrency for transactions economics with friendly countries. "
The declaration came a few days later Alireza Daliri, vice president for management and investment at the Directorate for Scientific and Technological Affairs, said that a digital currency" would facilitate the transfer of money [19459021Inanypartoftheworlditcanhelpusinthetimeofsanctions"
U-Turn Government
Speaking of a cryptocurrency is a sharp turnaround of the government, that Previously, in April, banks were banned from dealing with them altogether.
The authorities have not yet released technical details, such as how to integrate blockchain technology with the central bank, although they said it could only be a matter of months before a launch to local commercial banks.
How the currency is set will be an important factor in its possible success, according to Steve Hanke, professor of applied economics at The Johns Hopkins University of Baltimore, Maryland, and one of the world's leading experts on hyperinflation.
"It would not be difficult for Iran to launch a cryptocurrency, the question is whether it would have succeeded or not," he told RFE / RL, noting whether he was fully supported by gold under a system of currency board, it could be a "success".
"As long as the international community accepted the new cryptocurrency as something of value, it would not have faced sanctions problems, and if it were a cryptocurrency supported by gold, it would be accepted by the international community," Hanke added, also Director of the joint project Troubled Currencies with the CATO Institute.
Other analysts say that Iran could follow the steps of Venezuela, which launched the digital Petro in February – has so far raised $ 735 million for a currency supported by oil and aims to help overcome the sanctions by the European Union and the United States.
In the days preceding August 7, implementation of US sanctions, the declined rally to a record low of $ 112,000 on the black market, compared to the central bank's official rate of about 44,000 per dollar.
The fall, more than what we lost during the entire period of the nuclear sanctions from 2012 to 2016, have raised concerns among the Iranians that their economy in difficulty will only get worse under the sanctions, further damaging the rally.
& # 39; Millions Are Panicking & # 39;
Since he withdrew the agreement, Trump has flogged the flames by saying in a tweet that the United States will not tolerate Iran's "demented words of violence and death" when they respond a warning that the Iranian leadership has done for the president of the United States.
But even before the withdrawal, Trump's scimitar shots had already pushed the Iranians to look for safer places for their money.
In the first five months of the year, Iranians have acquired more than $ 2.5 billion of cryptocurrencies, according to local media reports.
Juan Villaverde, an analyst with Weiss Cryptocurrency Ratings, said that a cryptocurrency appeals to those who have no financial stability because their money remains out of the reach of the authorities who often implement financial controls that often result in devalued currencies.
"Millions of Iranians are in a panic," according to Villaverde.
"They are afraid not only of renewed sanctions, but also of economic collapse and financial repression, and many are desperately trying every possible way to leave the country, many others are scrambling to find safe haven for the little money they have left, "he added.
