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Turkey, Iran, Russia are all eyeing national cryptocurrencies

Andrew Munro 23 February 2018 NEWS

All of them have the threat of US sanctions in common with Venezuela.

US sanctions may be on the table for Turkey in 2018, and already are a fact of life for Iran, Russia and Venezuela. But they have something else in common, too. All four countries have made moves towards national cryptocurrencies.


In purely practical terms it makes a world of sense, and would make sanctions even more difficult to enforce by allowing the direct transfer of money between two parties without involving the global banking network.

Typically sanctions are enforced in a variety of ways, including the application of legal pressure to global banks and potentially hefty fines for banks that improperly deal with, or prevent deals with, sanctioned countries.

For example, Deutsche Bank was previously fined the equivalent of a few hundred million dollars for breaching US sanctions in Iran and Syria, and other banks have been fined similar amounts for breaching sanctions on North Korea. The hefty fines mean working with sanctioned nations is typically an undesirably risky proposition for banks, but a national cryptocurrency would let actors in sanctioned nations make deals without involving the banks.

However, it's not clear what kind of value a national cryptocurrency would have outside the nation. Perhaps after implementation it might still end up making sense to use a more universally accepted cryptocurrency like bitcoin or Monero for all one's sanction-breaching needs.

It's worth noting that this is almost certainly already happening around the world, and has been in various forms for a while. North Korea reportedly ran "gold farms" where prisoners would be forced to play computer games to earn the game's digital money, which would then be redeemed for real money.

Even then, the digital money brought the same advantages as a cryptocurrency. It let North Korea move largely untraceable funds outside the existing banking network and set up a revenue stream that was almost impossible to crack down on.

Today it's graduated to cryptojacking and Monero mining. The regime has to spend it somewhere, and it's safe to assume that Monero hasn't become the de facto currency on the streets of Pyongyang, so it's almost certainly being spent and accepted internationally.

At this stage, it seems likely that black market dealers would consider Monero or bitcoin to be a lot more reliable, in both value and anonymity, than the Venezuelan Petro or any other national cryptocurrency.


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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Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, XRB, SALT, BTC

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