Iran goes crypto to evade US sanctions despite $5.77m Bitcoin bust
US sanctions targeting Iran are forcing Iranians to seek financial evasive tactics, and cryptos are proving to be one solution.
Following the US sanctions on Iran after the US withdrawal from the 2015 nuclear agreement, the population was reportedly turning to Bitcoin for its “borderless and apolitical nature,” reported the Bitcoinist, an industry site
The problem is the US is already pre-empting that tactical maneuver.
The US government has confiscated hundreds of Bitcoins from Iranian holder assets, estimated at $5.77 million in purchase value, the Bitcoinist reports.
“The exact reason for the confiscation is unclear, though some speculate it has to do with Iranian bitcoin holders evading imposed U.S. sanctions,” said the Bitcoinist.
Sepehr Mohammadi, the head of Iranian’s Blockchain Association, stated that confiscation had begun last year and was still continuing. “Some people believe that this confiscation is because of circumventing U.S. sanctions by Bitcoin holders,” he said.
In April, the Central Bank of Iran (CBI) released new measures to prohibit the purchasing or selling of cryptocurrencies — one step in a wider reform to help boost Iran’s fiat currency.
Bitcoinist reported earlier this month that, despite the current legal ban, the current political and financial landscape could make bitcoin adoption in Iran advantageous.
Booked: Case in point
According to CryptoDisrupt, an industry site, as the US mount pressure on Iran a major Iranian hotel booking website is accepting crypto payments to avoid US-led sanctions imposed upon them. A large hotel platform http://hotelsiniran.com/ is apparently now accepting crypto as payments for hotels that would circumnavigate the sanctions.
The co-founder and president of the Hong Kong Bitcoin Association (HKBA), Leonhard Weese, recently revealed that the Iranian hotel booking portal has indeed informed its customer base that they are encouraging crypto payments in Bitcoin, ether and even bitcoin cash.
As hotelsiniran.com are now accepting crypto payments because they cannot accept standard payments from an international market, is the Iranian government also thinking about adopting crypto?
Largely as a result of US sanctions, Venezuela has adopted the Petro, an oil-backed cryptocurrency, and it seems that Iran is pondering opinions to do the same, CryptoDisrupt reported.
The head of Iran’s Parliamentary Commission of Economic Affairs (IPCEA), Mohammad Reza Pourebrahimim, recently said in an interview with the Russian publication, RBC:
“[IPCEA has already] obliged the Central Bank of Iran to start developing proposals for the use of cryptocurrency. Over the past year or two, the use of cryptocurrency has become an important issue. This is one of the good ways to bypass the use of the dollar, as well as the replacement of the SWIFT system.”
Cryptocurrencies are one of the major mechanisms Iran can use to evade the new US sanctions, chairman of the parliamentary Economic Commission, Iranian lawmaker, Mohammad Reza Pour-Ebrahimi, said in an interview published recently.
Speaking to the Mizan News Agency, he said the matter will soon be reviewed in the parliament of the Islamic Republic.
Iran’s national fiat currency, the rial, has lost half of its value in the past several months. The new set of economic sanctions is expected to take effect in November this year and Iranian authorities have been looking for ways to circumvent them, the Iran Front Page reports.
News also followed that bitcoins are unreliable and risky and other reports suggesting that the Central Bank of Iran (CBI) is looking for a way to prevent the use of digital currencies in the country.
According to Bitcoin.com, in April, the CBI issued a statement effectively banning local banks and other financial institutions from dealing in cryptocurrency, while at the same time the debate on how to regulate the space was still ongoing.
“Despite the clampdown, it was revealed in May that Iranians have sent abroad more than $2.5 billion to acquire cryptocurrencies,” Bitcoin.com reports.
“In the meantime, it became known that Iran has developed an experimental local cryptocurrency, while the Central Bank and the Information and Communications Ministry continued their work on creating a legal framework for the fintech industry.”