Oct 30, 2020
Cryptocurrencies help to overcome economic hardships. Iran will utilize cryptocurrencies to lower the effect of sanctions.
Iran made a significant move toward cryptocurrency adoption. According to the latest law amendment, Iran will use cryptocurrency as a medium of exchange in bilateral trade transactions. In conformity with the following sanction imposed by the United States Treasury Department, they will sanction 18 Iranian banks to prevent Iran use funds to finance illegal activities. Due to this reason, the judiciary bodies of Iran enacted amendment in response to a joint proposal by CBI and the Iranian Ministry of Energy. Iran believes that they will avoid the sanctions with cryptocurrencies. According to the amendment, only original and legal cryptocurrencies will be utilized in the import activities.
“The miners are supposed to supply the original cryptocurrency directly and within the authorized limit to the channels introduced by the CBI,” said the report.
Sanctions do not let Iran hold enough dollar reserves to trade with abroad, and using cryptocurrencies will help to circumvent those sanctions. Iran has been prone to cryptocurrency mining. They legalized cryptocurrency mining in August 2019 but limited the trading activities. The reason for the limitation is to prevent others from taking advantage of cheap energy sources in mining in Iran. Also, Iran let the power plants mine cryptocurrencies in the extraction sites. With those actions, Iran supported cryptocurrencies and mining in the country.
Some other countries used similar methods to avoid sanctions in international trade. China, Russia, and Latin American countries want to utilize cryptocurrencies. Venezuela government thinks the cryptocurrency can help to lower the effects of depreciated currency.