In the last years, we have heard how different countries proposed the creation of national cryptocurrencies. Among the interested countries, we find Estonia, Denmark, China, the UK, Venezuela, and also Liberland! To this list, we can add Iran. According to different reports, Iran may be working on its own national cryptocurrency. In this way, the Middle East country will try to gather some funds as Venezuela did with the Petro (its cryptocurrency).
Iran Will Launch a Cryptocurrency
The cryptocurrency market keeps attracting new investors and individuals. Blockchain technology and cryptocurrencies are helping societies to develop. Governments and enterprises are not left behind and are embracing the advantages of this technology.
Iran is one of these cases. The country is planning to launch a cryptocurrency, according to several reports. The Ministry of Information, Mohammad-Javad Azari Jahromi wrote a Tweet that said as follows:
“In a meeting with the Board of Directors of the Bank on post-digital currencies based on the blockchain, I… prescribed… measures to implement the country’s first cloud-based digital currency using the capacity of the country’s’ elite.”
در جلسهای که با هیئت مدیره پست بانک در خصوص ارزهای دیجیتال مبتنی بر زنجیره بلوکی داشتم، مقرر شد این بانک اقدامات لازم برای پیاده سازی آزمایشی اولین ارز دیجیتالی کشور را با استفاده از ظرفیت نخبگان کشور به عمل آورد. مدل آزمایشی برای بررسی و تایید به نظام بانکی کشور ارائه خواهد شد.
— MJ Azari Jahromi (@azarijahromi) February 21, 2018
With this announcement, the government has officially announced that is working in the creation of a national cryptocurrency.
It is important to mention that Venezuela has decided to create its cryptocurrency in other to attract funds. Venezuela is suffering from international sanctions that are hurting its economy. Among these sanctions, we find that Venezuela is not receiving financial support from other institutions or countries.
With its national cryptocurrency, the South American country is avoiding the sanctions allowing the country to keep receiving fresh funds for political campaigns (elections will be held soon) and for sustaining a completely destroyed economy.
Iran can be in a very similar situation. With diplomatic problems with the United States and its nuclear program and constant conflicts with Israel, Iran has also been receiving international sanctions. A cryptocurrency may help the Iranian government to avoid sanctions and keep an interesting flow of money entering the economy.
Should We Trust These Cryptocurrencies?
Clearly, Iran is not in a similar situation to Venezuela. The American country is suffering from the highest inflation on earth, almost 90% of its population is under the poverty line, and there are no clear signs of recovery in the short or middle term.
Venezuela did not create a national cryptocurrency because it believes that blockchain will change the country forever, but it was a simple and unregulated way to avoid international sanctions.
The situation in Iran is different. Even when it is not clear how this national cryptocurrency will work, the Iranian economy seems stronger than Venezuela’s one. Iran suffered from contractions in 2013 and 2015, but the growth rates in 2016 and 2017 were very strong and 2018 looks a very promising year as well.
Stavros Lambouris, CEO at HYCM Europe, commented on these two countries:
“Because cryptocurrency is based on a decentralized system that provides anonymity, it is possible that they could be used as a workaround to trade sanctions. So, it is not surprising to see those nations under sanctions are looking to develop cryptocurrencies of their own.”
How Would the World React?
The United States has given its opinion about the Petro. The U.S. Treasury Department warned that these cryptocurrencies issued by countries like Venezuela could violate sanctions. As mentioned before, the sanctions included prohibitions to purchase Venezuelan debt.
The same may happen with an Iranian cryptocurrency.The United States has already warned investors that these are methods created by the countries in order to avoid sanctions. Furthermore, there are some countries like Poland and Argentina that have already rejected any transaction with the new issued Petro.
At the moment, the U.S. is considered as a crucial actor of capital for securities and tokens. It has the biggest economy on earth and several global financial operations pass through the North American country.
Iran may be working on its national cryptocurrency. But clearly, the main intention is to avoid sanctions imposed by the major economic powers. Iran is involved in diplomatic conflicts with several countries and that could be one of the factors that pushed the government to work in this cryptocurrency.
What we can see is that Iran is not thinking about issuing a cryptocurrency like other countries. Estonia or Marshall Islands wanted to gather funds in order to improve different services in their own countries. It is always important to understand which are the intentions behind national cryptocurrencies from countries that have not so good reputation in the international stage.
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