Iran is using crypto to pay for imports instead of dollar or euro

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• Opinion

Despite banning the trading of crypto in 2019, the Iranian government is now preparing to widely use crypto for international trade payments by the end of September.

Iran has been under sanctions imposed by the US for a number of years. The sanctions have been aimed at the Iranian finance and banking sector, which has prevented the country from doing business across most international borders.

According to the UK-based website Iran International, Trade Minister Reza Fatemi Amin said on Monday that the administration had finalised regulations for using cryptocurrencies instead of the dollar or euro.

Earlier in August Iran made its first test run and purchased a shipment of cars worth $10 million, with the payment made in cryptocurrency. Iran’s Deputy Minister of Industry, Mine and Trade Alireza-Peyman-Pak said in a Tweet:

“This week, the first official import order was successfully placed with رمز_ارز# worth 10 million dollars. By the end of September, the use of cryptocurrencies and smart contracts will be widespread in foreign trade with target countries,”

Opinion

For good or for bad, Iran has made the decision to use cryptocurrencies in order to facilitate trade and to avoid sanctions imposed by the US. Given that cryptocurrencies are a ‘trustless’ technology that operate without the need for third parties, and completely outside of the existing dollar reserve system, it will be extremely difficult for the US to sanction or track them.

It may be that Iran is the first of many countries to realise the utility of cryptocurrencies such as bitcoin. The US has weaponised the dollar against Russia, removing it from the SWIFT payment system, and freezing and seizing Russian assets.

Other countries may be wondering whether they are next, and cryptocurrencies that are outside of any government or agency to influence could be an attractive bet for some.

Just as the dollar or indeed any other fiat currency can be used for bad as well as good purposes, this is no different for crypto. However, the difference between the two is that cryptocurrencies such as bitcoin respond only to the original code in which they were written, and therefore the supply and issuance is known with total certainty and full transparency.

Dollars and other fiat currencies on the other hand are printed at the whim of central banks with mostly dreadful consequences for the citizens that hold them, as their purchasing power dwindles at a rapid rate.

Given that the fiat monetary system could be quite close to a complete collapse, it might behove countries to have a deep look into bitcoin in order to better understand its advantages.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.