Lawmakers in the United States presented a bill aimed at responding to Iran's efforts to develop a national cryptocurrency, the last state sanctioned to turn its attention to the crypt. Following in the footsteps of heavily sanctioned Venezuela, Iran is now rumored to be creating its own sovereign cryptocurrency, specifically designed to evade US-led economic sanctions.
Introduced by Republican Mike Gallacher of Wisconsin, the Blocking Iran Illicit Finance Act requires a report on Iran's activities on the development of cryptocurrency. Senate Ted Cruz of Texas presented a bill in the Senate calling for sanctions against anyone who is consciously assisting the Iranian effort, including by providing funding, technical support and services.
The invoices follow from the withdrawal of the United States from the joint global action plan, commonly known as the Iranian nuclear deal. In a statement published next to the bill, Gallacher said that now is the time to increase the pressure on Iran through the reinforcement of sanctions.
He explained: "Withdrawing from the JCPOA was only the first step to increase pressure on the Iranian regime … We now have an important window to impose maximum economic pressure and degrade the Iranian regime's ability to export violence across the region. This legislation does exactly that, effectively cutting Iran from the international financial community ".
In recent weeks Iran has hosted increasing activities around cryptocurrency and blockchain. Low energy prices have made the Islamic Republic a destination for mining encryption, while Iranian government officials have spoken positively about the potential of blockchain technology.
Now, with a sovereign cryptocurrency under development, it seems that Iran could be in a position to mitigate the effects of sanctions by conducting transactions on a blockchain, rather than through traditional financial systems.
In Venezuela, the controversial socialist government of President Nicolas Maduro created the Petro, a cryptocurrency supported by state oil reserves. Despite the opposition of the United States and the wider international community, the cryptocurrency has been specifically designed to avoid economic sanctions, with the support of allies like Russia.
With Iran now hoping to follow in Venezuela's footsteps, it remains to be seen whether legislators can effectively end development efforts.