Iran’s national cryptocurrency is ready to be deployed, as the US sanctions go into full effect, which is mostly the reason for the Iranian Rial (IRR) to experience 300% inflation so far in 2018. The goal of this national cryptocurrency is to conduct international business since Iran’s international payment systems have been crippled.
The new Iranian state-backed cryptocurrency will be pegged 1:1 with the IRR, and will initially be used by commercial banks in Iran once the Central Bank of Iran approves the cryptocurrency. Approval is likely, considering this cryptocurrency was developed by the Informatics Services Corporation at the request of the Central Bank of Iran.
This announcement is nearly simultaneous with the re-implementation of sanctions by the United States on Iran starting 5 November 2018. Total blockades on Iran’s shipping, aviation, nuclear industry, and banking have been imposed by Washington. These sanctions are designed to ensure Iran never develops a nuclear weapon.
The crucial international payments network SWIFT has severed ties with Iranian banks. Additionally, due to the sanctions, Bittrex and Binance have stopped serving Iranian customers. Essentially, it is illegal for any company that does business in the United States to also do business in Iran.
The IRR has spiraled into hyperinflation during 2018, with the exchange rate going from 36,000 IRR per USD on New Year’s to 144,000 IRR per USD as of 11 November 2018. This suggests that the threat of sanctions, and now the implementation of sanctions, is severely damaging the Iranian economy.
The national cryptocurrency of Iran is designed to circumvent international sanctions, giving Iranian banks the ability to send money worldwide. It seems likely that when the national Iranian cryptocurrency is launched it will be deemed illegal by a United States Presidential executive order, similar to what happened with Venezuela’s Petro.
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