Cryptocurrencies could offer Iran way around Sanctions

For bitcoin to become a widespread investment tool, there is also a cultural obstacle. Even if so-called foreign exchange bureaus would be allowed to sell bitcoin, small investors would be hesitant to trust the value of a virtual currency. Nonetheless, experts opine that there is a market and that investors would like to use official foreign exchange bureaus as opposed to going through unlicensed middlemen.

Amid these developments, the CBI has announced that it will issue an official position on virtual currencies by the end of the current Iranian year (March 20, 2018). Considering the mindset of Iranian decision-makers, it is most likely that there would be an effort to create a localized cryptocurrency that could be used for international payments with those trading partners that would accept the Iranian virtual currency.

Such a move would be partly motivated by the desire to be in full control of the process and partly to prevent fraud, but it would mean that the Iranian approach would be centralized around the CBI, which would have to authorize all transactions. Such a rigid approach would be completely against the decentralized concept of Blockchain, which will work as the backbone of future cryptographic transactions.

Having experienced harsh external sanctions, Iranian officials prefer not to create any dependency on international instruments. Though one segment of the political elite wishes to see a greater level of integration in international processes, the more suspicious stakeholders will push an agenda against international cryptocurrencies. Hence, for now, the use of digital currencies will remain in a legal and political limbo.

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