Iran to use cryptocurrency as payment for imports

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Cryptocurrency could save an ailing economy.

Iran is on a continued exploration for the possible use of cryptocurrency as a means to alleviate the crippling impacts of economic sanctions imposed by the United States against the Islamic republic.

CoinTelegraph has cited a report from the Iranian Financial Tribune that revealed the Central Bank of Iran (CBI) allowed banks and foreign exchange shops to utilize cryptocurrency as payments for imports.

However, the regulatory structure of the arrangement states that the digital currency that will be used as payment must be derived from licensed crypto miners only, as mining operations are officially permitted by the Iranian state as industrial activities. Operators are also required to get a license from the Ministry of Industry, Mine, and Trade.

A strategy that dates back to 2018

The Financial Tribune said the government of Iran had approved regulations that enabled crypto to be legally used for imports last October 2020.

That is, provided that miners sell their coins directly to the central bank of Iran. But the strategy appeared to be several years in the making, according to a 2018 report from Iranian think-tank Majlis Research Center.

“According to experts, one way to avoid the adverse effects of the unjust sanctions is to use cryptocurrencies for foreign trade,” the report disclosed.

Crypto to the rescue

At the beginning of the year, Shahab Javanmardi, a member of the Iran Chamber of Commerce, Industries Mining and Agriculture pushed for the government’s use of digital currency to oppose trade difficulties during the tough geopolitical climate.

“Repatriating revenue from exporting gas and electricity is not possible under the present (U.S. sanctions). The government can promote use of excess electricity output or power generated by small-scale plants to mine cryptocurrencies and make up for the locked resources,” Javanmardi said.

Iran follows the example of Venezuela, another nation sanctioned by U.S., and attempted to use Bitcoin (BTC) as payment for imports from Iran and Turkey.

Image courtesy of Cointelegraph News/YouTube

Jet Encila

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Jet Encila

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