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Iran national digital currency set for release in next 3 months

Posted: 26 July 2018 4:17 pm
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National digital currencies are a space to watch, especially if you're trying to enforce sanctions.

Iran is one of a handful of countries with a national cryptocurrency on the agenda, and it's due for release within the next three months, reports Iranian news site PressTV.

The project has been in development for a while, it reports, and it's currently in the stage of removing pre-launch flaws.

"We are trying to prepare the grounds to use a domestic digital currency in the country," said Alireza Daliri, deputy for management and investment affairs at the Directorate for Scientific and Technical Affairs. "This currency would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions."

If it does launch within the next three months, it would probably be the second official national cryptocurrency to hit the airwaves, with the first being Venezuela's storied Petro crypto.

The Petro has been "out" for a while, but its official introduction was recently delayed until 20 August to coincide with bolivar reforms.

Dodging sanctions

Daliri specifically referred to Iran's national digital currency as a tool to help evade sanctions, much like Maduro and other politicians in Venezuela specifically said the Petro was intended to help escape US sanctions.

In the context of Russia's own forays into cryptocurrency as an economic weapon and the current tenor of USA-Iran relations, it's also interesting to note that Venezuela's Petro was a Venezuela-Russia joint venture to ostensibly serve as a kind of test case for the potential of digital currencies to evade sanctions.

Compared to decentralised cryptocurrencies, national digital currencies would probably be better at dodging sanctions in some ways, and worse in others.

Russia's own experience to date is that cryptocurrency exchanges are frustratingly KYC/AML compliant and actually cashing out crypto to fiat when you're not supposed to has proven to be a surprisingly difficult task. Cryptocurrencies can be moved anywhere in the world extremely easily, but the end user typically still needs to cash it out before they can use it.

National digital currencies, in the form of official digital currencies that are recognised as money by a country's authorities and central bank, would help overcome that cashing-out problem by simply being spendable as money. The catch is that it would only really be usable as money in that one country, which kind of undermines the easily-moved-overseas benefit of digital currency.

The ideal solution, for someone who really wanted to get around sanctions, would still probably be to find someone who accepts Monero or another privacy coin in lieu of money.

It's another tool in the toolkit though, and still retains the benefits of being able to go around the banks and financial institutions who are actually responsible for enforcing KYC/AML laws.

With Venezuela's Petro set to go live on 30 August, the Iranian digi-rial (for lack of an official name yet) scheduled for the next three months and Russia currently being keenly focused on the decentralised cryptocurrency space, all against the backdrop of current political going-ons, formally recognised sanction-dodging cryptocurrencies might be an interesting space to watch.

Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VET, XLM, BTC and ADA.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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