In the wake of Trump’s withdrawal from the Iran Nuclear Accord and threats of further sanctions, Iran is looking to insulate itself from trade restrictions and International oversight.
Last Resort for Iran
The theocratic government of Iran is facing growing unrest at home as people suffer under oppressive religious conservative rule, exacerbated by growing economic troubles. Iran’s economy is bleeding from International sanctions, and any bank that wants to deal with US customers are forced to enforce the sanctions on Iran.
However, the Iranian theocratic government is working to minimize the damage. In their latest bid to get around the sanctions, they have begun work on creating their own national cryptocurrency, under government control. If they manage to roll out a currency and give it the power of fiat inside Iran, it will keep that value abroad as well. And as every crypto enthusiast knows, we are still in something of a Wild West era of crypto, with large exchanges that move countries to avoid regulation and oversight.
If Iran’s national cryptocurrency began trading against other cryptos, it would be very difficult for the international community to enforce sanctions on the country.
Not the Only Country
Iran is not the first country to turn to crypto to escape sanctions. Reports came out early this year that North Korean hackers were targeting South Korean exchanges in attempts to scam and steal users’ crypto holdings.
Any money stolen that way would be a lot easier to turn into goods and services from other countries than North Korea’s own currency, which is subject to even harsher sanctions than Iran is facing. Also like North Korea, there is evidence that Iranian state sponsored hackers are creating viruses that use people’s computers all over the world to mine crypto for the Iranian government, as well as using ransomware to take computers and data hostage, with ransom to be paid in Bitcoin.
There is some irony here, as Iran’s government has banned its own citizens from holding Bitcoin, and have confiscated it where they have found it. The Iranian government wants to get around International sanctions on trade, but they do not want their own citizens to have the same tool to escape the restrictions they impose.
Other countries are not oblivious to these developments, however, Iranian crypto assets have already been confiscated in several cases, totaling approximately 500 BTC seized by US officials. At today’s price, 500 bitcoins would roughly amount to a little over 3.2 million US dollars.