Is Iran’s Central Bank Developing a Cryptocurrency
Iran’s relationship with cryptocurrencies can be best described as unpredictable. The authorities have gone full circle from blatantly rejecting the virtual assets to now fully embracing them.
According to reports, the central bank is working on an official cryptocurrency as it tries to evade the crippling effects of US sanctions on the country. Sources citing Press TV indicate that the project is being undertaken with the help of some companies in the country.
Before the sanctions hit, Iran had banned banks in the country from dealing with cryptocurrencies. The move along with other measures was meant to protect the then rapidly declining rial as people sought alternatives.
Iran is following in the footsteps of Venezuela which has its own official cryptocurrency, the Petro vigorously promoted by its president Nicholas Maduro. Venezuela is also struggling with US sanctions and the Petro which is pegged on the country’s oil reserves was meant to keep foreign money coming in.
However, apart from the initial fanfare, the real status of the project remains largely unknown. Under the plan, purchases done using the Petro would be discounted although there is no clear evidence as to who might have taken the offer. At one point in March, president Maduro said the had raised $5 billion but this could be independently verified.
Russia is thought to have been heavily involved and the project has since received some awards in Moscow, lending some credence to the rumours.
Russia itself was at one point mulling over the possibility of introducing its own virtual currency.
Marshall Islands is one other jurisdiction that has launched its own national cryptocurrency being used alongside the USD. Cities like Dubai have also considered cryptocurrencies as part of broader development plan.
Similarly, the city of Seoul has previously considered rolling out its cryptocurrency to boost service delivery in the local economy.
But as the fate of the Petro has shown, national cryptocurrencies can offer little hope in the face of mounting sanctions.