Iran and Russia Working on Cryptocurrency Transactions to Circumvent U.S Sanctions

Due to the dark cloud of the U.S economic sanctions hovering over Iran and Russia, the two countries are now working towards using digital currencies in order to mitigate the influence of U.S Dollar on their economy.

With the U.S President Donald Trump formally withdrawing the nuclear-deal with Iran, the country’s economic condition is in doldrums with the continuous falling rate of its native fiat currency rial, against the U.S Dollar. Russia too has been facing the brunt with international sanctions hovering over its economic sanctions.

Thus in an effort to stay away and escape the dependence from the U.S-Dollar-based commerce, the two countries are having high-level discussions recently, as reported by Russian publication RBC.

Mohammad Reza Pourebrahimi, chief of Iran’s Parliamentary Commission of Economic Affairs has already “obliged the Central Bank of Iran to start developing proposals for the use of cryptocurrency”.

The official further added: “Over the past year or two, the use of cryptocurrency has become an important issue. This is one of the good ways to bypass the use of the dollar, as well as the replacement of the SWIFT system.”

This revelation was recently made by the Iranian official following a meeting on discussions of the economic policies with the Russian counterpart Dmitry Mezentsev. In addition to this, Pourebrahimi also confirmed he had already conducted discussions with the Russian Parliamentary Committee on Economic Policy and the two countries have established cooperation in their cryptocurrency pact.

He said: They share our opinion. We said that if we manage to promote this work, then we will be the first countries that use cryptocurrency in the exchange of goods.

Since the beginning of 2018, the two countries have been working on having their own state-backed digital currencies. In February, Iran’s ICT Minister Mohammad Azari-Jahromi confirmed about the country exploring options of having a state-owned digital currency backed by the blockchain technology. He also said that “A pilot model for review and approval will be presented to the banking system of the country,” which would be followed by a nation-wide rollout if the project turns successful.

Russian President Vladimir Putin also ordered his ministry to explore the option of having a state-owned digital currency ‘Cryptoruble’ backed by the blockchain technology. Putin’s economic advisor Sergei Glazev, at that time, said that a ‘state cryptocurrency’ would serve as a useful tool in order to circumvent the economic sanctions.