Iranian General Looks to Cryptos to Bypass Sanctions

The head of Iran’s Civil Defense Organization, Brigadier General Gholam Reza Jalali, spoke with the state-owned TV station Channel 2 news on Monday, hinted at a government sponsored digital asset, as he expounded on the benefits of cryptocurrencies. With the sanctions placed against the state, this could be the work around that the government is looking for.

According to local news outlet, Jalai stated to Channel 2:

“Cryptocurrencies can help bypass certain sanctions through untraceable banking operations.”

With the sanctions announced by US President Trump against Iran earlier this year, the decentralized nature of cryptocurrency, this will help Iran to become independent from the US dollar, and its SWIFT setup for global commerce. This is not the first time Iran was subject to being blacklisted by SWIFT, as they had previously experienced a similar episode between 2012 to 2016. The current sanctions has dropped the Iranian Rial to historic lows.

General Jalai further elaborated:

“Our major problem here is the US dollar, because the United States uses its national currency to control any country’s SWIFT operations, so we should reduce dependence on the dollar and replace it with another currency.”

This government-backed cryptocurrency could fall in line with previous discussions with Russia. After President Trump withdrew from the nuclear deal with Iran, talks were initiated with Russia to engage in a cooperation of a bilateral trade using cryptocurrency.

Minister Mohammad-Javaz Azari, of the Information and Communications Technology (ICT) ministry, was the first to announce a working plan of creating a national cryptocurrency back in February 2018. With the project currently being developed, it has been made public by the country’s Informatics Services Corporation (ISC), a central bank-affiliated body, that the project is using open-source Hyperledger Fabric technology, the blockchain framework initially developed by IBM and Digital Asset. The cryptocurrency will also be backed by the Rial. The initial run of the national cryptocurrency will first be used for interbank transfers before being released to the citizenry.