During the latter stages of last year, the Iranian government announced the decision to implement a new Bitcoin Infrastructure which saw the cryptocurrency as a means to avoid transactions whiles at the same time making way for its citizens to trade internationally without any form of restrictions. After global rail SWIFT banned Iran from its network, the country experienced a banking cut-off, which lasted four years until the intervention from the then U.S President, Barack Obama’s nuclear deal in 2016, which saw all sanctions on Tehran lifted.

Iran’s minister of Information and Communications Technology (ICT), in November last year announced that the ministry was planning to turn to Bitcoin as a solution to avoid economic sanctions which had previously delinked Iran’s banking system from global commerce and finance.Amir Hossein Davaee, the ICT minister speaking at that time stated that: “The ministry of communications and information technology has already conducted a number of research studies as part of efforts to prepare the infrastructure to use Bitcoin inside the country.”

New reports have now emerged suggesting that the Iranian government are going against their word of preparing the infrastructure for the use of bitcoin, however, the country has decided not to entirely opt-out the cryptocurrency world with plans being undertaken to create and launch its own state-run cryptocurrency.

The country’s central bank has “cooled in” on the burning desires of many Iranians who were still optimistic that the country was going to embrace Bitcoin, debunking previous claims of recognizing Bitcoin and any other cryptocurrency as legal currencies, and rather warned investors already on board and potential ones that their financial assets may be lost whiles investing in the crypto world due to the unpredictable market volatility. Local news resource, Iran Front Page quoted the central bank as saying “The wild fluctuations of the digital currencies along with competitive business activities underway via network marketing and pyramid scheme have made the market of these currencies highly unreliable and risky.”

Additional reports even state that the central bank is collaborating with other financial institutions to cook up a mechanism to control and prevent cryptocurrencies in Iran.

Riding on false hope all along

The Islamic Republic as at last year November was still under international sanctions which had taken a negative toll on its some vital sectors if the economy including energy, finance and the shipping industry and the idea of Bitcoin coming to save the day was really a good one to many Iranians. With its decentralized system, it cannot be controlled by a central identity which means countries are not able to sanction payments.

With the involvement of many highly-rated corporate bodies, this dream was on the verge of manifesting into a reality. Iran’s High Council of Cyberspace (HCC), just some few days after the alleged news about Bitcoin broke, came out offering support to the idea of adopting the cryptocurrency. “We welcome Bitcoin, but we must have regulations for Bitcoin and any other digital currency,” stated HCC secretary Abolhassan Firouzabadi. With all these sanctions hanging around their neck, the government was keen to figure a way out and the implementation of Bitcoin seemed to be the way to go during that desperate times. But from the look of things now, Iranian citizen’s hope of enjoying trades internationally and other privileges such as the use of payment platforms such as Braintree, PayPal, and Venmo are still hanging in the balance.

Following in the footsteps of others?

Although many Iranians are already involved in the cryptocurrency world, the government is however not and just last week, Iran’s technology minister broke the news that plans were underway by the government to create their own, state-issued cryptocurrency, which will most likely allow the country to feature on the international market again.

If this move happens, Iran wouldn’t be the first country to undergo such initiative but will rather add to the already existing ones such as the Petro. The “Petro” was launched just recently by the Venezuelan government which became the first state-issued cryptocurrency ever. The cryptocurrency is backed with barrels of its oil and is aimed at restoring the economy of the country. Venezuela is currently experiencing an economic meltdown which has saw its national currency turn in something worthless and has left a number of people in the country suffering from food shortages and other forms of suppression on human rights. As to whether the “Petro” will be a hit or a miss is still very speculative.

Reports from sources of the Russian government also suggest that the idea has been considered. Israel is also another county who is taking the idea of a state-issued currency at heart. Israel’s Ministry of Finance last year confirmed that the country is indeed considering their own cryptocurrency dubbed the Shekel, which will be aimed at reducing the number of cash transactions made within the country.

 

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