/Iran could start using cryptocurrencies to trade with Russia to avoid Western sanctions

Iran could start using cryptocurrencies to trade with Russia to avoid Western sanctions

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Iran and Russia could start using cryptocurrencies to avoid Western sanctions, Russian news portal RBC reported yesterday, May 17.

According to Mohammad Reza Pourebrahimi, the chairman of the Economic Commission of the Parliament of Iran who visited Moscow recently, his country is considering to use crypto in international trade operations, in particular with Russia. This will help it to bypass the US sanctions.

At a meeting with Dmitry Mezentsev, the Chair of the Federation Council Committee on Economic Policy, Pourebrahimi said that they have “engaged the Central Bank of Iran to start developing proposals for the use of cryptocurrency.”

Pourebrahimi added that he discussed this topic in the State Duma’s Committee on Economic Policy the day before and that Iran had established cooperation with Russia on this issue:

“They [Russia] share our opinion. We said that if we manage to move this work forward, then we will be the first countries that use cryptocurrency in the exchange of goods.”

Reza observed that there has been a lot of talk about crypto coins such as Bitcoin in the past two years. He sees this technology as one of the good ways by which the country can bypass the use of the US dollar and also replace the SWIFT banking system. The Central Bank of Iran has been engaged to start developing proposals on the use of cryptocurrency. He said this while at a meeting with Dmitry Mezentsev who is the head of the Russian Federation Council Committee on Economic Policy.

Last week, Pourebrahimi had reported that without access to the international banking system, Iranian citizens have so far succeeded in siphoning a staggering $2.5 bln out of the country in crypto.

Venezuela, another country facing international sanctions, recently released its own oil-backed cryptocurrency, the Petro, in a move that some critics saw as an illegal way to enter the international financial markets. After the Petro’s launch, both Turkey and Iran had expressed interest in releasing their own state-backed cryptocurrencies as well, with Russia’s own CryptoRuble reportedly set to launch in mid-2019.

In 2015, a deal which was named Joint Comprehensive Plan of Action (JCPOA) or simply ‘Iran nuclear deal’ was made. The parties to the agreement were the UN P5+1 (the US, UK, Russia, China, France, Germany, and EU) and Iran. Iran was to reduce its stockpile of low-enriched uranium by 98% and not to build heavy-water facilities, among other things. In return, the country would be allowed to access the international market which it had been blocked from for many years.

Earlier in 2018, President Trump of the United States said that his country does not recognize the 2015 deal and will resume with the sanctions that were there previously. It is based on this move by the US that Iran is considering using the digital currency.