Iran Might Just Have its Own Cryptocurrency in the FutureMay 6, 2018
Cryptocurrencies have enjoyed great popularity in recent years and Iran is considering the development of its own digital currency. Mohammad-Javad Azari Jahromi, minister of the country’s Ministry of ICT, said that Post Bank is working on creating a cryptocurrency.
The Central Bank of Iran recently ordered local banks to stop engaging in activities that are cryptocurrency related. Fears of money laundering due to the ongoing threat of possible sanctions that might occur if the nuclear deal fails prompted the bank to issue the order. However, the ban will not have any effect on Iran’s cryptocurrency project.
According to Minister Mohammad Javad Azari-Jahromi, the ban won’t mean the restriction or prohibition of the use of cryptocurrency in domestic development. He said that the experimental model was ready. Azari-Jahomi announced in February that Postal Bank had been working with local experts to develop an experimental cryptocurrency that would be presented to banks for assessment and approval. Islamic Finance doesn’t prohibit digital currencies, but actually supports them.
Iran has also officially unified its open market and official exchange rates after rial dropped to an all-time low due to concerns over possible returns of devastating sanctions if the United States decides to back out of the nuclear agreement. U.S. President Donald Trump is expected to announce a decision on May 12. The idea of a national institution developing its own digital currency is no longer new. In fact, it has been discussed in various countries for the last few years. Singapore, China, Russia and other countries have been trying to develop their own cryptocurrencies.
The fundamental blockchain technology of digital currencies allows for secure and instant transactions and eliminates the need for third parties. According to the Bank for International Settlements, institutions may need to develop their own digital currencies in the future as the blockchain technology allows for better transaction efficiency and secures customer anonymity.
Iran is not the first country to jump into the cryptocurrency bandwagon. Venezuela has made the country’s first oil-backed cryptocurrency called petro available to the public. The official currency of the country has lost so much value due to recent political disorder, instigating many locals to resort to Bitcoin. However, many of those who tried to build their own Bitcoin holdings through mining were arrested by the government. North Korea has also been reported to be mining cryptocurrencies and trying various attempts to use cryptocurrencies to avoid sanctions.