US sanctions are crippling Iran, but CCN has published an article claiming that the Iranian government may launch a state-backed cryptocurrency as early as today.
The rumours come via news network, Al Jazeera, which believes that Iran will use the annual two-day Electronic Banking and Payment Systems conference, that starts in Tehran today, to make the announcement. The them of this year’s conference is ‘blockchain revolution’.
Iran has been discussing a state-backed cryptocuurency since last summer when trump announced his sanctions for alleged “malign activities.” However, the real sucker punch came in November when some of Iran’s banks were banned from using the banking SWIFT system for rapid international payments. As Al Jazeera says, “Countries excluded from SWIFT cannot pay for imports or receive payments for exports, leaving them crippled financially, and having to rely on alternative methods of moving money.”
It is expected that the Iranian cryptocurrency will be rolled out in phases. At fist it will be like a stablecoin and will be linked to the rial. This will allow payments between Iranian banks and other Iranian institutions active in the crypto space. Later its use may be extended to the Iranian public as a means of paying for consumer goods in Iran.
Iran still needs to overcome the problem of making international payments, but the cryptocurrency would potentially resolve this, as Al Jazeera explains, “the state-backed digital currency could lay the groundwork for Iran to join a blockchain-based international payments system that could emerge as an alternative to SWIFT.”
This might include Russia, a long-time ally of Iran. Following the ChainPoint 18 conference in Yerevan, Armenia on November 14, Iran signed a trilateral blockchain cooperation agreement with Russia and Armenia, Vladimir Putin said, “Russia is actively working with partners to establish financial systems that are fully independent of SWIFT.” But he did not name the partner countries.
It is also possible that Iran could use a crypto-rial to skirt sanctions and trade with other partners, using the Said Arabia and United Arab Emirates crypto partnership as a blueprint.