Iran has recently been making headlines regarding the development of an state-backed cryptocurrency. This is due to crippling United States sanctions that are progressively tightening since the Iran Nuclear Deal was thrown out by the Trump administration, which has caused hyper-inflation of the local fiat currency rial (IRR). Further, the US is stopping Iran from buying and selling foreign currencies, precious metals, and commodities. Iran now has a team developing an Iranian state-backed cryptocurrency from scratch, which raises the question, why go through the trouble of developing a state-backed cryptocurrency instead of just using Bitcoin?
Venezuela is in a similar boat, having launched its own cryptocurrency called the Petro. The Petro is supposed to be backed by Venezuelan oil, but the technical specifications of Petro and any relation it has to oil are undisclosed. That alone makes it too hot to touch for crypto investors, but the US has also made all Petro trading illegal. If Iran were to successfully create and launch a state-backed cryptocurrency, it would almost certainly be made illegal like the Petro, massively inhibiting its potential to be traded globally.
If Venezuela and Iran were to just start using Bitcoin, they could completely avoid this problem. The US cannot ban Bitcoin even if Venezuela and Iran declared Bitcoin to be their official currency. Bitcoin has worldwide infrastructure, making it highly liquid and optimal for trading, and it is decentralized. Since Bitcoin is decentralized and cryptographically secure, to the point that not even the most powerful supercomputer can hack its network, it would be impossible to freeze Iranian or Venezuelan funds sent with Bitcoin. This would renew Venezuelan and Iranian economic freedom, which has been crippled by US sanctions.
Even though these countries are having very rough times economically, they still have large amounts of wealth which they can use to buy Bitcoin. If they were to buy Bitcoin covertly at first and then announce to the world that they have adopted Bitcoin as their main currency, Bitcoin would rally. This would automatically bring extra wealth to Iran and Venezuela, something they desperately need right now.
Also, Bitcoin already has value due to broad worldwide demand and an excellent track record. This gets rid of the problem of trying to give a state-backed cryptocurrency value by backing it with something like bank reserves or oil, which can result in a messy and awkward situation that ultimately leaves everyone skeptical, inhibiting growth in value.
The best way to sum this idea up is the old saying, if it ain’t broke don’t fix it. Bitcoin is a pure decentralized cryptocurrency, with solid worldwide infrastructure and demand worldwide gives it value. It functions perfectly well for Venezuela’s and Iran’s need for a currency that can get around sanctions; they could even use the Bitcoin to buy Monero and Zcash if they want to be extremely secretive.
It makes little sense for Iran and Venezuela to try and develop their own cryptocurrency when it will probably be made illegal and won’t be as good as Bitcoin. Instead, these nations and any nations in the future which desire a state-backed cryptocurrency, should simply focus on using tested and proven Bitcoin.
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