Is Iran Sidestepping Sanctions Using Crypto?

As international sanctions continue to tighten against Iran, the country has been forced to find creative ways to circumvent the restrictions and access the global financial system. One method that has been gaining traction in recent years is the use of cryptocurrency. Could Iran potentially be sidestepping sanctions using crypto? And how does it do that?

Iran has been subject to a wide range of sanctions imposed by the United States and other countries, including restrictions on its banking sector and oil exports. These sanctions have made it difficult for Iran to access the global financial system and conduct international transactions. However, the country has been turning to crypto as a way to sidestep these sanctions and access the global economy.

How is Iran using crypto to possibly bypass sanctions?

One way Iran is using crypto is through the development of its own digital currency. In 2018, the Central Bank of Iran announced that it was working on a digital version of the rial, the country’s national currency. This digital rial would be used to facilitate transactions between Iranian banks and financial institutions, bypassing the need for foreign currency.

Another way Iran is using crypto is through the use of decentralized exchanges (DEXs). DEXs are a type of cryptocurrency exchange that allows users to trade cryptocurrencies without the need for a centralized intermediary. Because DEXs are decentralized, they are not subject to the same regulations as centralized exchanges, making them a popular choice for Iranians looking to avoid sanctions.

Iran is also using crypto mining as a way to bypass sanctions. Crypto mining is the process of using computer power to verify transactions on a blockchain and earn rewards in the form of cryptocurrency. Because crypto mining does not rely on traditional banking systems, it can be a way for Iranians to earn an income and access the global economy without relying on foreign banks. As an example, in August of 2021, Iran had placed an import order of USD 10 million, which was then paid from the mining revenues that the country generated.

Conclusion

In conclusion, as the international sanctions against Iran continue to tighten, the country has been forced to find creative ways to access the global financial system. Cryptocurrency has emerged as a key tool for Iranians looking to sidestep the restrictions and conduct international transactions. Iran’s own digital currency, decentralized exchanges and crypto mining are some of the ways the country is using crypto to bypass financial sanctions.