The Iranian government has registered its first import order, to the tune of $10 million, which is to be paid using cryptocurrencies. Iran opted to this payment option because of its lack of foreign currencies due to sanctions on its nation. This was first reported by the Tasnim news agency, a popular news agency, based in the nation.
Recall that Iran amended its digital assets legislation to allow locally mined cryptocurrencies to be used for purchases. The report cited a tweet from Alireza Peyman-Pak, an official at the Ministry of Industry, Mine and Trade, which said (in Farsi) that by the end of September, Iran’s “use of cryptocurrencies and smart contracts will be widespread in foreign trade with target countries.”
In 2019, the government legalized crypto mining in the country. However, the nation still strictly regulates the sector. As an example of its strict regulation, last year, the country cracked down on local miners over energy use.
What you should know
- The country’s head of its Trade Promotion Organization, Alireza Peyman-Pak, explained that they will be making widespread use of “cryptocurrencies and smart contracts” for foreign trade with “target countries” by the end of September.
- This is the largest publicized crypto transaction of this scale made by any one nation. It may also be the first transaction of many that would bypass U.S. sanctions on the country, and as Reuters put it, trade with similarly sanctioned countries such as Russia. The U.S. sanctions on Iran include practically all imports.
- Although there are concerns about the volatility that relates to the market, which has caused some issues with other countries that have formally adopted crypto as legal tender like El Salvador and the Central African Republic.
- It’s also interesting to consider where Russia’s official stance on crypto currently stands. Russian President Vladimir Putin has officially held crypto at an arm’s length, calling such talks of official trade “premature.”
- Though of course, Russia has good reason to side with Iran on avoiding sanctions, at least in terms of how that friendship looks to western leaders. Putin recently made a pit stop in Iran to meet the country’s President Ebrahim Raisi alongside Supreme Leader Ayatollah Khamenei where they helped ink a $40 billion agreement for oil.
- North Korea, on the other side of U.S.-sanctioned nations, has been raking in funds from illicit crypto heists, according to federal law enforcement. Officials are reportedly concerned those millions in crypto are being used to fund the DPRK’s nuclear program. The U.S. has gone so far as to sanction crypto mixers such as Tornado Cash, for allegedly helping North Korea launder the stolen funds.
- It’s an open, not-so-secret secret that Iranians have been making heavy use of various cryptocurrencies in order to evade sanctions. The crypto exchange Binance recently came under fire in the U.S. for facilitating anonymous trade by Iranians through its platform, despite sanctions.
- The company, which does not list a headquarters, has said it’s since changed its KYC and anti-money laundering technology and policies to better adhere to sanctions on countries like North Korea, Syria, Cuba, and Iran.
- In a frank and often irritated interview with Coindesk, Binance’s Global Head of Sanctions Chagri Poyraz said that they still allow Iranians to exchange crypto if they conduct business outside Iran.
- The company’s VP of Global Intelligence Tigran Gambaryan further claimed that it would be illegal for European companies to comply with U.S. sanctions against Iran. Of course, it’s much more complicated than that, and since the company still does not claim any one country for its main operations, it’s so far skirted the rules and regulations of any one nation’s restrictions on international trade.
Though it’s not like the country’s adoption of crypto has been all sunshine and roses. Iran has facilitated crypto mining in the country, and reports showed that 4.5% of all the world’s mining took place in the country. But Iran has since cracked down on the practice due to the immense power consumption required by these rigs leading to rolling blackouts. The vast majority of those power vampire mining operations were apparently unlicensed and illegal, willing to take advantage of the country’s limited but subsidized grid.