US Now Targets Iranian Cryptocurrency Project To Step Up Sanctions
A bill introduced in the US House of Representatives seeks to curtail the Iranian cryptocurrency project. According to the authors, Iran intends to use the digital currencies to circumvent sanctions intended to punish the country.
In august, Iran unveiled plans to launch a national cryptocurrency to revive economic activity. The country’s economy took a huge beating from the sanctions re-imposed by the Donald Trump administration. Interestingly, Former President Obama had agreed to reduce the sanctions with some concessions on the Iranian part. However, Trump scrapped the deal, rolling back the clock.
Iranian cryptocurrency project to revive the economy
The August plans for the “sovereign” cryptocurrency would help the country evade the ensuing sharp credit crunch.
“The state-backed cryptocurrency will be similar to bitcoin in that transactions are carried out on an online ledger called a blockchain, however it will not be possible for people to mine it because the infrastructure will be private,” a report said in regard to the plans for a national digital currency.
However, it seems the take-off of the plans could face tough headwinds as US regulators talk tough in that regard. In particular, the US harbours huge worries regarding the project saying that it will allow the country to launder money.
Titled “Blocking Iran Illicit Finance Act”, the bill corresponds in substance to another bill before Senate. In the bill, sponsored by Ted Cruz (Republican, TX), anyone who facilitates Iranian cryptocurrency project ambitions faces tough sanctions. Particularly, one faces sanctions in the moment they aid the country to sell, transfer or supply the digital currency.
Deteriorating relations
The bills are just another instance that brings out the souring relations between the two long-time adversaries. In November, SWIFT disconnected the country from its network, citing pressure from US regulators. However, the official statement from SWIFT announcing the disconnection made no mention of the US sanctions on Iran.
Interestingly, Iran is not the only country to look to crypto to help resuscitate a failing economy. Venezuela set the precedent when it launched the Petro, a highly controversial cryptocurrency pegged on a barrel of oil.
The need for the Petro to work was also a way to circumvent US sanctions placed on the country. In March, Trump’s administration proscribed any dealings in the Petro but that did not stop Venezuela. The country’s President, Nicolas Maduro is still actively championing for the coin’s adoption by Venezuelans. In the same breath, it is unlikely that Iran will comply with the demands set out in the bill.