Iran has surprised friend and foe by reporting through Iranian state media that the country will officially step into crypto later this year. The largest country in the Middle East has placed an import order of USD 10 million, which will be paid from the mining revenues that the country has generated. Iran legalized cryptocurrencies back in 2019, after which several parties turned to mining. The income obtained from this is therefore used for trade two years later.
Is crypto the way for Iran to evade sanctions?
Iran is burdened by heavy international sanctions and is, among other things, cut off from payment network SWIFT and goods imports and exports. Ministry of Industry, Mining and Trade spokesperson Alireza Peyman-Pak hinted that this is only the beginning of Iran’s ambitions for using cryptocurrencies:
“From September, Iran’s cryptocurrencies and smart contracts will be widely used for foreign trade.”
It remains to be seen whether Iran’s way of avoiding sanctions will work. Crypto may be decentralized and cannot be censored, but the transparent ledger also ensures that everyone can watch. Two weeks ago, after research by blockchain analysis company Chainalysis, it emerged that pro-Russian separatists did indeed receive funding through crypto, but that this was dwarfed by Ukraine’s receipts.
Crypto for International Trade
Earlier in January, Alireza Peyman-Pak confirmed the Iranian government had greenlighted the use of cryptocurrencies for international trade, something which had been planned since April of 2021, with a proposed framework for ‘homeland-mined’ cryptocurrencies Peyman-Pak had said in January:
“We are finalizing a mechanism for operations of the system. This should provide new opportunities for importers and exporters to use cryptos in their international deals.”
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