Iran Ready to Have Their Own Cryptocurrency

One of the main characteristics of cryptocurrencies is that it isn’t controlled by a third party. It knows no politics. And though regulators have the ability to ban cryptocurrencies, there is less control on the part of regulators how people are going to use digital currencies. And now, countries that are dealing with inflation such as that of Venezuela has found a practical use for cryptocurrencies. Today, Dash is widely used by businesses and individuals in Venezuela.

Aside from accepting digital currencies, Venezuela has also been known for making a state-backed cryptocurrency. Petro is a cryptocurrency that is backed by the country’s oil. The primary reason for this is to be able to transact with other countries without worrying about sanctions.

These days, it isn’t just Venezuela that decided to take this route. Iran is actually looking to circumvent existing US sanctions by having its own cryptocurrency. According to Alireza Daliri who is the deputy for management and investment at Directorate for Scientific and Technological Affairs, “We are trying to prepare the grounds to use a domestic digital currency in the country”. Daily continued saying that “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”.

No Details Yet

There are still no technical details known regarding the cryptocurrency. However, it is seen that in the next three months, a national encrypted key for domestic banking could be in fruition after ironing out inconsistencies.

This isn’t the first time that Iran has been reported to be dabbling with cryptocurrencies. In previous months, the looming return of US sanctions under the Trump administration has prompted Iran to consider this option.

Against Bitcoin

Though Iran is looking closely at a state-sponsored cryptocurrency, the country doesn’t have crypto-friendly regulations. In April, it has banned banks from dealing with Bitcoin and other cryptocurrencies. The reason behind this move is that Iran is concerned about the possibility of money laundering. It was also made in order to halt a potential currency crisis from happening in the country.

Information and Communications Technology Minister Mohammad Javad Azari-Jahromi during that time mentioned that though there’s a ban, the project regarding the state-sponsored cryptocurrency such as that of Petro will not be affected.

“The central bank’s (ban) does not mean the prohibition or restriction of the use of the digital currency in domestic development”. He also added that time “Last week, at a joint meeting to review the progress of the (local cryptocurrency) project, it was announced that the experimental model was ready”.

Is this a good move by Iran? Though they have practically banned cryptocurrencies, they have come up with their own version. It could simply be a knee jerk reaction considering that their currency, the rial has plunged after the news that there is a possibility of returning US sanctions as the the United States exited the multilateral nuclear accord. And this has been a major blow since there has already been a pact made in 2015 not only between the US and Iran but also together with other major economies.