The Central Bank of Iran is proposing a further step towards the long-debated revaluation of the country’s national currency, the rial. It paves the way for Bitcoin to find more prominence in an already struggling economy.

Central Bank governor Abdolnaser Hemmati made the following comments yesterday, suggesting that government mismanagement has finally led to the government being forced to take drastic economic measures: “A bill to remove four zeros from the national currency was presented to the government by the central bank yesterday and I hope this matter can be concluded as soon as possible.”

As a result of disruption to the economy, much of it a direct effect of US sanctions against Iran, crypto adoption has continued to grow much in the same way as it has in Venezuela prior to this week’s upheaval in that country, which has now come to head with fears of a military coup to physically oust President Maduro.

In 2018, the rial lost a staggering 60% of its value due to Iran being hit by further swingeing sanctions from the US. This despite the International Atomic Energy Agency indicating that it had been complying with the restrictions to its nuclear program laid down in the 2015 Joint Comprehensive Plan of Action (JCPOA).

Critics of such economic measures suggest that a re-denomination of the rial would have little effect, particularly given other nations attempt to shave zeros from struggling currencies over the years, namely Brazil, Zimbabwe and more recently, Venezuela in an attempt to breathe new life into the near-worthless bolivar.

Conditions such as these often bode well for digital currencies, as nationals seek some form of financial certainty, lacking in their own national currencies. This has been the case in Iran with P2P website Localbitcoins.com volume rocketing in times of unrest, such as during the government protests in late 2017 and then again after recent abandonment of the 2015 nuclear deal by the US recently.

Computer network and security administrator Abed Pariazar says that as dollars become rarer crypto becomes an option, arguing, “Use of cryptocurrency will increase this year. Our currency will lose its value as inflation is an endless road.”

Pariazar added, “My income is based on rial and if I keep it I will lose it all in the near future. I can’t change to [the US] dollar easily so, for this reason, I prefer to change my income to cryptocurrency. More and more people are doing this.”

Maintenance technician Milad Boroumand explained, “In my country, most of the people change their money from rial to United States dollars or the euro, but at the current time we have a few sources of Bitcoin to invest in.” He added that he can see the numbers of people using cryptocurrency in Iran doubling or even tripling as internet use becomes more commonplace throughout the country.

 

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