Iran has had a tough time since the US imposed strict sanctions on the Middle Eastern nation. For that reason, it appears as if the country is one step closer to opening a new door to international trade. The country recently banned all of its citizens from using crypto trading websites and added them to the national list of blocked sites. Despite this, a number of citizens used VPNs to trade cryptos, which were then confiscated by the US government.
These US sanctions have caused the country a significant amount of trouble, harming its economy in the process – which is a sign that the sanctions are working. However – in a similar fashion to Venezuela – the Iranian government is biting back, as they have set out to make their own cryptocurrency in order to keep the country’s economy thriving.
Iran Denied its Own Money
Iran holds $350 million in a German bank, understandably given its current economic situation, earlier this year it went to withdraw this money. However, America requested that the German bank deny this request, starving Iran of its own funds. As Iran already has a solid stance against crypto, it would have made the government look weak and two-faced if they converted this into BTC in order to get its money back. This means that the money sat in the German bank is likely to remain there until Iran and America resolve their current dispute – which doesn’t look likely at this point.
Circumventing Sanctions
Similarly to Venezuela, no countries want to knowingly do business with Iran in fiat, as America will look negatively upon them, which could create potential trade issues. This means that cryptos are the only way to skirt around sanctions and restore financial freedom to the country. However, in order for the government to get its hands on BTC, it needs to unlock the crypto exchanges and buy over the counter (OTC). At this point, many exchanges don’t want to deal with Iranian customers, so this is forcing the government to make their own crypto in order to sell and buy goods from overseas.
Nicolás Maduro – president of Venezuela – created the Petro in order to do exactly the same thing, and just last week he made it the official currency of the nation. Iran could do something similar to skirt around sanctions, however the cryptocurrency would need to prove its worth and be traded on a handful of exchanges to make it viable.
Crypto Providing a Way Out for Failing Economies
Around the globe, failing economies are turning to cryptocurrency as a solution. Entrepreneurs in Nigeria prefer accepting payments for goods and services in Bitcoin, as fewer overseas companies are accepting the Naira. In Venezuela – despite the Petro being introduced – citizens are turning to Dash as a method of payment for goods and services. This is due to the low cost per transaction and the speed at which Dash transactions are confirmed. The emergence of digital currencies during such dark economic times highlights the role cryptocurrencies will play in global economies, especially as they begin to collapse.
It appears that in order for a government to become crypto friendly, its economy must begin to slide downhill. This could be the catalyst for cryptocurrencies to become accepted around the globe and spark mass adoption. Once cryptos see mass adoption, prices should stabilize slightly and trade in ranges similarly to traditional forex. It will most likely end the waves of mass volatility, which will make institutional investors happier to pour money into the crypto sphere.
