Iran Set To Launch Rial-Backed Stablecoin To Circumvent Us Sanctions
The Islamic State of Iran is nearing the launch of a cryptocurrency whose value corresponds to the national currency. According to a regional media outlet, the Secretary General of Iran’s Central Bank revealed that investigations into blockchain technology are almost over.
Mohammad Talebi, the Central Bank official, said the institution is building necessary structures to support blockchain technology. Basically, this is to say that appropriate laws will come into force to assure the success of the cryptocurrency. Interestingly, the focus is on the blockchain technology since it underlies cryptocurrency. However, the government will explore other potential benefits of the technology.
Cryptocurrency will help to boost the economy
Concerning the national rial-backed cryptocurrency, Talebi said that investigations are still underway. However, Iranians might soon begin settling their transactions in the digital currency. As per Talebi, the digital currency requires certain conditions to be in place. This way, once the proper structures are in place concerning blockchain technology, Iran will be ready for the stablecoin.
“Presently, the countries are moving towards creating national cryptocurrencies. This will also create certain changes. Investment markets are also moving towards using the means based on the blockchain technology,” Talebi concluded.
Interestingly, Talebi’s comments ring a certain kind of familiarity with another high-ranking official of the government. Late last year, Head of Iran’s Civil Defence Organization, Brigadier General Gholam Reza Jalali said crypto could help mitigate US sanctions. Jalali, together with other high-ranking officials that have spoken of crypto, thinks crypto could help boost the economy.
A difficult challenge ahead for the crypto ambitions
Notably, the US resumed sanctions on the Persian nation last year which include curbs on financial transactions. Further, the decision by Belgium-based SWIFT to blackout services to Iranian banks last year deepened the situation. Effectively, Iranian entities cannot move money around unless they an alternative.
Interestingly, Russia, also US-sanctioned, proposed the formation of an alternative messaging system to SWIFT. Although it is unclear who the member states of the new SWIFT rival will be, some sections of the media imply that the Commonwealth of Independent States (CIS) could offer members.
Nevertheless, it is possible that Iran’s attempts at the stablecoin coin could be unsuccessful. This is because there is already a Bill before the US Senate aimed at scattering the plans. Dubbed Blocking Iranian Illicit Finance Act, the Bill targets Iran and other countries that are aiding it on its crypto ambition. As such, it is likely that the new digital currency might “fall short of combating US restrictions.”