Faced with intensifying global trade sanctions over its nuclear programme, Iran is adopting crypto payments for imports into the country.
Iran’s Ministry of Trade, represented by Minister Reza Fatemi Amin, has confirmed its approval to use cryptocurrency payments for imports to increase trade within the country.
Iran sees writing on the wall
The new guidelines cover all aspects of cryptocurrencies such as the license approval process as well as fuel and energy supply provisions to mining operators.
In other words, Iranian businesses only get the green light to use crypto for imports instead of US dollars ($USD) or euros ($EUR). The implementation of crypto payments for imports is accepted as an urgent method under international financial pressure.
Regulatory approval for crypto usage was received on Sunday, weeks after Iran placed the first import order worth $10 million in cryptocurrency, Amin reported. The transition to this digital asset, while considered an experimental solution, somewhat reflects Iran’s defining powers to sanctions around the world.
Alireza Pemanpak, the head of Iran’s Trade Promotion Organization (TPO), said in a statement earlier this month that, “By the end of September, cryptocurrencies and smart contracts will be widely used in foreign trade with target countries.”
Blockade busted right
Nuclear power – Global trade sanctions on Iran have intensified due to the country’s support of the nuclear energy deal. With this bad situation, Iran was forced out of the global banking system. The adoption of cryptocurrencies is an ongoing effort to tackle this issue.
It is important to note that Iran’s stance on cryptocurrency is quite complex but it appears to be more bullish over time. It should come as no surprise that crypto transactions were banned in the country in 2019 – a common view of governments to that date. However, Iranian regulators allow the use of cryptocurrencies such as bitcoin in import payments.
Iranian regulators are very supportive of mining. The Iranian Ministry of Industry, Mines and Trade had authorized 30 crypto mining facilities as of June 2021, and over 2,500 new mining operations had received permits.
However, Iran ordered bitcoin mining operators to cease operations and confiscated over 9,000 illegal mining operators in the following months. This was due to the pressure of illegal operations on the national grid.
We will not accept starvation – for anyone
Ever since the US imposed sanctions on Iran, people are increasingly turning to bitcoin and other cryptocurrencies as a safe haven.
Cryptocurrency is becoming a powerful weapon for sanctioned countries to address the costs and frustrations. Russia is the most recent country to have shared a similar experience.
Soon after Iran’s aggressive regulatory move, the Russian prime minister commented in a public statement that Russia could follow suit by authorizing the use of crypto for imports.
Mishustin outlined the important role digital assets play as a “secure alternative” in cross-border payments, and the need for its adoption.
meaning,
“We need to intensively develop innovative areas, including the adoption of digital assets. It is a secure option for all parties that can guarantee seamless payments for the supply and export of goods from abroad.”
Earlier, Russia was reportedly considering accepting bitcoin as payment for its oil and gas exports. The country was forced to move away from the dollar as sanctions from the West intensified over its invasion of Ukraine.
If people stop using the currency the restrictions will no longer take effect. The transition to cryptocurrency as an alternative financial system has raised great concerns over its ability to evade sanctions.
The Bank of Russia is also well positioned with the idea of using crypto in cross-border payments as long as it doesn’t affect Russia’s domestic financial system. In addition to cryptocurrency, some countries are experimenting with the use of a central bank digital currency.
China has long developed Beijing’s national digital currency. Imagine if Russia decided to create one, would the US sanctions, also known as an implicit representation of its currency dominance, still pose a powerful threat?