Cryptocurrencies could offer Iran way around Sanctions

One of the obstacles will be the CBI and the government’s hesitation to allow cryptocurrencies to become another platform for speculative investments in Iran. Furthermore, a number of Iranian stakeholders are concerned about the resurgence of so-called pyramid schemes using virtual currencies.

In fact, Iran has had its challenges with pyramid schemes — especially a scheme called Gold Quest — and there is no appetite for the revival of similar schemes by using cryptocurrencies.

The fact is that some of the brokerage firms in Iran are offering bitcoin investments to their clients, though the transactions are not approved by the Tehran Stock Exchange. For bitcoin to become an official investment vehicle, it would have to be endorsed by the country’s Securities and Exchanges Organization (SEO). According to a statement by Shapour Mohammadi, head of the SEO, a conclusion on virtual currencies has not yet been reached.

Mohammadi recently stated that “one of the most important points in the process of securing the SEO’s approval is the question of value creation of an investment vehicle in the economy. As long as the potential value creation of bitcoin remains ambiguous, it won’t be endorsed.”

Some will argue that bitcoin and other cryptocurrencies would allow Iranian businesses to engage in international transactions without having to open bank accounts and credit facilities in international banks. However, for that purpose, the bitcoin market is still too volatile and also too unregulated to be fully endorsed by Iranian authorities. Furthermore, from a political point of view, one key aspect will be whether Iranian holdings in bitcoin would be safe in regard to being blocked by the United States or any other authorities.

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