Iran May Use Cryptocurrencies to Evade U.S. Economic Sanctions

Mohammad Reza Pour-Ebrahimi, chairman of the parliamentary Economic Commission in Iran has revealed that the country is considering using cryptocurrencies to avoid the effects of U.S economic sanctions. In an interview with the Mizan News Agency, Pour-Ebrahimi also said that cryptocurrencies could help to reduce the U.S dollar’s dominance in international trade.

According to reports the topics will be discussed in future Iranian parliamentary meetings.

The Iranian government may also discuss money treaties to avoid the impact of sanctions as Iran deals with its currently volatile economy. The Iranian rial has lost half its value in the past few months and a new round of U.S sanctions will be implemented in the country in November.

Some of Iran’s citizens have begun to use cryptocurrencies to protect their finances from high inflation and the economic uncertainty in the country. On the run up to public protests in Iran in January 2018, data published by Coindance revealed that trading between the rial and bitcoin saw record volume. A week in December 2017, saw 1000 percent increases when compared with a week in early November 2017. Though this also coincided with the cryptocurrency market’s December peak prices.

During the January 2018 protests, some Iranians called for wider acceptance of cryptocurrencies and later news reports indicated that Iran was considering issuing a national cryptocurrency and regulating the cryptocurrency market.

In April 2018, the Central Bank of Iran (CBI) banned banks and financial institutions from dealing with cryptocurrencies due to the risks of money laundering and terrorist financing. One month later, Pour-Ebrahimi issued a statement that said Iranian’s citizens had sent $2.5 billion dollars USD out of the country whilst purchasing cryptocurrencies.

Reports by CCN indicate Pour-Ebrahimi also made the following statement after a meeting with Dmitry Mezentsev, head of Russia’s Federation Council Committee on Economic Policy.

“Over the past year or two, the use of cryptocurrency has become an important issue,” said Pour-Ebrahimi. “This is one of the good ways to bypass the use of the dollar, as well as the replacement of the SWIFT system.”

Russia and Venezuela have been pinpointed as countries that could also use cryptocurrencies to avoid sanctions.

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