As U.S. President Donald Trump declined to renew a certain nuclear deal with Iran, the citizens of that particular country are turning toward Bitcoin. Iran currently is facing renewed sanction from the United States that may signal the rise of certain economic problems. There have also been reports that the Iranian government is a particularly looking to create a state-owned cryptocurrency.
IMPENDING ECONOMIC TROUBLES
New sanctions from the United States will affect Iran’s exports especially on oil that may form a portion of its GDP. The country’s currency, Rial, has lost a part of the exchange rate on the U.S. dollar. This decrease in their value follows several months of shortage in the foreign exchange and financial difficulties in the banking sector. As a result, the local economy of Iran has been declining in this situation is expected to worsen with the issuing of fresh sanctions. Furthermore, the Central Bank of Iran (CBI) has tried to remedy the situation but it seems like it has been to no avail. The APEX bank unified the official and black-market foreign exchange rates yet the rial has continued to suffer.
A CRYPTO SOLUTION
There are numerous reports that the Iranian governmet is developeing their own state-owned cryptocurrency. The country’s ICT Minister, Jayad – Azari – Jahromi, announced in April that an experimental model of the project has been ready ever since. This announcement is following the banned place by the CBI on Bitcoin and also other cryptos. The country’s apex bank that prohibited other banks and other lending institutions from facilitating certain cryptocurrency transactions.
If Iran manages to develop a local crypto, it may follow the footsteps of Venezuela. The Latin-America nation has launched its petro cryptpcurrency earlier this year and a lot of people see petro as a way of aiding economic restrictions that are affecting the country. In contrast, the United States has banned the petro and will likely diminish its exchangeability. If Iran decides to follow the same path, its cryptocurrency may suffer the same ban.
BITCOIN TO THE RESCUE
Even with the Bitcoin ban, Iranians are still using bitcoin to send money out of the country. According to other reports in their local media, their residents have spent an amount of more than $2.5 billion by acquiring cryptos in the recent month. However, the CBI ban is expected to reduce the outflow by making more other transactions a lot more difficult.
The Chairman of the Iranian Parliament’s Economic Eommission, Mohammad Reza Pourebrahimi, believes that most of the crypto related activities in the country are speculative investments. He also said that foreign cryptocurrencies are a threat to Iran’s banking system. As such, it will be necessary for their government to develop a national virtual currency.