Along with all the other consequences of a fall-through in talks over a US-Iranian nuclear agreement, the country might also again face heavy U.S. sanctions. However, this time, Iran may have found a way to dodge those sanctions and that way is using cryptocurrencies. According to a report, an Iranian MP has proposed a joint venture to Russia. The proposal mainly involves the two countries using cryptocurrencies to dodge any international economic sanctions that the U.S. might place on Iran in the near future.
The idea was originally brought up by Mohammad Reza Pourebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs, during a meeting with Dimitry Mezentsev, Russia’s Chair of the Federation Council Committee on Economic Policy. Since the US-Iranian nuclear agreement talks broke down, the Iranian Rial has been declining and has reached a state of panic.
The Iranian Rial has dropped down to IRR 50,000 per USD causing a number of problems for Iranian economy. The Iranian public has gone into a state of panic where “many are scrambling to find a refuge for the little money they have left.” According to Juan Villverde, the Iranian public not only fears a number of potential economic sanctions but it’s also dreading a potential economic collapse and financial repression throughout the country.
Cryptocurrencies could help Iran dodge this terrible possibility by acting as an alternative payment method which offer faster payments than SWIFT’s interbank payment system. Also, even if the transaction time is not a problem, there is still the possibility of Iran getting cut off from SWIFT’s services if US sanctions are imposed on the country.
It was reported earlier this year that Iran has decided to stay away from major cryptocurrencies like Bitcoin and Ethereum and is planning on launching its own local cryptocurrency. Reports claim that an experimental version of this local cryptocurrency has already been developed.
Pourebrahimi announced that a closer collaboration with Russian in this situation will be beneficial for both nations. Pourebrahimi stated that Russia shares Iran’s opinion and if this joint venture moves forward, Russia and Iran will be the first countries to use digital cryptocurrencies for international-level trade. Pourebrahimi claims to have been involved in discussions with Duma’s – a Russian state – Committee on Economic Policy.
Dimitry Mezentsev has also announced in favor of the proposal by saying that it will be beneficial for both the countries to collaborate. Mezentsev stated that interbank relations between Iran and Russia should be of great importance after a high chance of international sanctions being imposed on both the countries.
Iranian people have quickly adopted cryptocurrencies in recent years. According to a local news website, the Iranian public has purchased cryptocurrency worth more than $2.5 billion in recent years. This is a surprising number given the fact that commercial banks are not allowed to deal with cryptocurrencies.