Iran Legalizes Cryptocurrency Trade in an Attempt to Bypass US Sanctions

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In an attempt to bypass decades old US sanctions, Iran is trying to promote international trade using cryptocurrency. The announcement of the cryptocurrency adoption plan was made by the deputy minister of Industry and Trade in Iran. This came as a surprise to many international onlookers, as back in 2019 Iran outright banned cryptocurrency trades. The country supported this move by placing an international order of its own using bitcoin.

Tehrans Announcement

The deputy minister of Industry, Mining and Trade of Iran has made a large announcement on cryptocurrency. The country has legalized foreign transactions using crypto for businesses. This includes businesses of all sizes, including small ones. The minister also announced that the country has officially made its first purchase using crypto. The transaction was worth $10 million USD.

Some believe that this announcement is good thing for the cryptocurrency industry. On the other hand most argue that Iran is signaling it discovered a way to bypass sanctions. Tehran could not do trade with the majority of the world since it was cut off the SWIFT international banking system. Experts say that these sanctions helped dismantle Iran's nuclear program. Because of this Iran has always been looking for alternatives that are anonymous in nature.

Many worry that this development is a step towards establishing larger trade routes with countries like Russia. Iran has showed repeated support to Russias invasion of Ukraine. Currently Russian is working on a deal to acquire Iranian drones to use in the Ukraine war. Experts worry that with the rising tension around the world, hostile countries that are under sanctions might be encouraged to unite against the west.

Iran's 2019 Cryptocurrency ban

Back in 2019 cryptocurrency was outright banned in Iran. This prevented any payments or transactions from being made using the technology. Experts claim that this has nothing to do with the countries stance on cryptocurrency, but rather with mining. Back then then, the country hosted thousands of mining facilities consuming and watering down the grid. In response the country banned cryptocurrencies. Some miners were allowed to continue operating but only under a special permit. Sources claim that Irans new cryptocurrency law addresses mining issues. Specifically the bill is said to address supply of fuel and electricity for mining.

The Affects on Crypto

Many crypto-enthusiasts argue despite the tensions with Iran this development is a good thing for the crypto space. Others argue that it's the complete opposite and that Iran is ruining the potential future of cryptocurrency. At the moment it is not clear what affect this will have in the space, but US lawmaker are likely to respond. Some claim the lawmakers response might be what affects the industry.

In the past, US law makers voice concerns over potential use of cryptocurrencies to circumvent sanctions. In a bid to avoid this, Bidens administration was even looking for a way to restrict Russia's crypto market but failed to do so. US lawmakers are expected to scramble for ways to restrict such use of cryptocurrency and the evasion of sanctions. European regulators already tried to address this issue by passing a new legislation to ensure "crypto-assets will be traced and identified to prevent money laundering, terrorist financing, and other crimes". Many worry that the response might harm the crypto industry, but is highly unlikely.

Conclusion

Despite Iran just making this announcement, this is something that lawmakers have predicted in the past. Many worry about this development but the reality is that cryptocurrency is not a real threat to sanctions. US lawmakers should be more focused on the issue of trade partners willing to trade with sanctioned countries, as the substance to trade with will always be available.

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