Broad-based approach in Iran to adopt cryptocurrencies in global trade

Summary:

• Iran explores options to introduce digital currencies in global trade

• Iranian central bank publishes a new draft framework on crypto

• Litecoin shows willingness to bounce off the support

We have not seen any spectacular movements on the cryptocurrency market for a long time and Wednesday is not an exception. However, as opposed to lack of price movements, there are still quite interesting revelations which could matter in the longer-term. Today we are zooming in on Iran from where we have been offered a bit conflicting reports of late.

The first report concerns an Iranian idea to introduce digital currencies in global trade. The country is exploring various options to do so including holding negotiations with other countries. Mohammad-Reza Modoudi, the acting head of Iran’s Trade Promotion Organization (TPO), said the country was negotiating the use of cryptocurrency in its financial transactions with eight countries such as Switzerland, South Africa, France, England, Russia, Austria, Germany and Bosnia. Note that these countries were exempt from severe economic sanctions imposed on Iran by the United States in November last year. By slapping the restrictions, the rest of the world has been cut off from the country’s oil, shipping and gas market, including its financial system. If Iran introduces virtual currencies in global trade, then it would be able to do business with many countries circumventing the US sanctions.

While on the hand Iran aims to spread digital currencies in global trade, on the other one the central bank seems to be sceptical when it comes to cryptocurrencies. While the central bank has reversed a previous ban on crypto assets, it has imposed restrictions on the use of digital currencies within the country. In a report that institution wrote that it “is aimed at organising and defining boundaries of ongoing crypto operations in the country, and allowing traders to plan for their future.” It also added that “using global cryptocurrencies as methods of payment inside the country is prohibited.”