Iran has been under several US economic sanctions since 1979. However, the Iranian government seems to have bypassed the embargo to complete a trade worth millions of dollars using cryptocurrency. The government plans to fully leverage digital currencies to facilitate foreign trades in the future.
Iran set to fund foreign trades with crypto
The Iranian state-affiliated media agency Tasnim reported the news on Tuesday, noting that the government successfully completed an import worth $10 million using cryptocurrency.
‘By the end of September, the use of cryptocurrencies and smart contracts will be widely used in foreign trade with target countries.Iran’s Ministry of Industry, Mine and Trade.
The development comes months after the Iranian government amended rules on the use of cryptocurrency in the nation. On June 1st, Cryptopolitan reported that the Central Bank of Iran (CBI) proposed the amendment to enable the nation’s cabinet to fund imports through digital currencies.
The government or CBI sources the crypto funds from local miners. Some miners in Iran are offered subsidized energy to operate but sell their coins to the central bank only. According to the Cambridge Bitcoin Electricity Consumption Index, Iran is one of the world’s largest cryptocurrency mining regions.
More oversight on crypto
The United States and its ally countries had imposed sanctions on Iran amid illicit nuclear activities, among other things. The embargo crippled the nation’s economy and even led to a two-year recession. By adopting crypto for foreign transactions, the Iranian government could largely boycott the ban, given the inherent properties of crypto and blockchain smart contract.
Early this year, amid the Russia-Ukraine conflict, the US regulators called for more regulatory oversight on digital currencies. They warned the use of cryptocurrencies by countries like Russia could undermine the potency of the government’s sanctions. The news today could stir the US regulators to proactively regulate the space against sanction evasion.