Mon. Sep 26th, 2022

Iran made its first official import order using cryptocurrencies this week, the semi-official Tasnim news agency reported Tuesday, a move that could allow the Islamic Republic to circumvent US sanctions that have crippled the economy.

The order, worth $10 million (approximately Rs 80 crore), was a first step in allowing the country to trade via digital assets that bypass the dollar-dominated global financial system and trade with other countries similarly limited. by US sanctions, like Russia. The agency did not specify which cryptocurrency was used in the transaction.

“By the end of September, the use of cryptocurrencies and smart contracts will be widely used in foreign trade with destination countries,” an official from the Ministry of Industry, Mines and Commerce said on Twitter.

The United States imposes a near-total economic embargo on Iran, including a ban on all imports, including those from the country’s oil, banking, and shipping sectors.

Tehran is one of the largest economies yet to embrace cryptocurrency technology, born in 2008 as a payment tool aimed at eroding government control over finances and economies.

Last year, a study found that 4.5 percent of all Bitcoin mining took place in Iran, in part as a result of the country’s cheap electricity. Cryptocurrency mining could help Iran earn hundreds of millions of dollars that can be used to buy imports and lessen the impact of sanctions.

Cryptocurrencies like Bitcoin are highly volatile, making them impractical for large-scale payments.

The European Union said on Monday it had submitted “final” text to revive the 2015 Iran nuclear deal as four days of indirect talks between US and Iranian officials that concluded in Vienna.

Under the 2015 deal, Iran curbed its nuclear program in exchange for relief from US, EU and UN sanctions. But former US President Donald Trump reneged on the nuclear deal in 2018 and reinstated harsh US sanctions, prompting Tehran to start violating the deal’s nuclear limits about a year later.

The Central African Republic (CAR), one of the poorest countries in the world, has also embraced cryptocurrencies. It became the first African state to make Bitcoin legal tender in April, and last month launched its own digital currency.

Last year, El Salvador also adopted bitcoin as legal tender, though the project has been marred by public skepticism amid falling cryptocurrency prices.

© Thomson Reuters 2022

Cryptocurrency is an unregulated digital currency, is not legal tender and is subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, business advice or any other advice or recommendation of any kind offered or endorsed by NDTV. NDTV will not be liable for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

Read More: Iran Places First Import Order Using Cryptocurrency, Could Help Dodge US Sanctions