Iran Develops Experimental Local Cryptocurrency

Only a few weeks ago Iran’s central bank imposed a ban on any operations involving cryptocurrencies, saying that the digital assets could be used for the purpose of money laundering, terrorism financing and the transfer of illegal proceeds.

Meanwhile, shortly afterwards Iranian Minister of Communications and Information Technology Mohammad Javad Azari Jahromi, Iran’s youngest minister known for his innovatory approach, announced that the project of Iran’s experimental local cryptocurrency was ready.

 Recall that Azari Jahromi mentioned the project related to Iran’s own virtual currency for the first time this February. Iran’s cyber security authority backed the project, saying that if virtual currencies were properly regulated, it would support them.

After making the announcement about the readiness of the crypto project, Azari Jahromi specified that Iran’s ban on cryptos does not cover “home-grown” digital currencies.

Iranian authorities also said the Iranian cryptocurrency will be backed by assets, so it will be compliant with Sharia rules.

Iran is currently dealing with the currency crisis after rial dropped to an all-time low on concerns that the United States might exit a multilateral nuclear accord and impose even tougher sanctions on the country. The country unified its official and open market exchange rates and prohibited changing money outside of banks.

Some experts say cryptocurrencies could help countries avoid US sanctions as the global economy is heavily dollarized, and the US can block large foreign trade segments through the imposition of sanctions. That said, how would you convert Bitcoin into fiat money if almost all dollar transactions are processed by US correspondent banks, and they are entitled to block payments by any person or entity under sanctions?