An Iranian general has strongly hinted that the country could soon turn to cryptocurrencies as a way to evade international financial sanctions.
Brigadier General Gholam Reza Jalali, head of Iran’s Civil Defense Organization, on Monday spoke about the ‘great opportunities’ presented by cryptocurrencies in the latest indication that Tehran is developing a state cryptocurrency.
As reported by the Mehr news agency, Jalali was speaking to the state-owned TV station Channel 2 news on Monday when he stated:
“Cryptocurrencies can help bypass certain sanctions through untraceable banking operations.”
In doing so, Iran expects to reduce its dependence on U.S. dollar-based payment rails operated by SWIFT for global commerce. U.S. President Donald Trump announced sanctions against Tehran earlier this year, sending the Iranian Rial to historic lows.
“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,” the senior Iranian official added.
Iran has previously suffered a banking blackout from SWIFT in a four-year hiatus between 2012-2016.
As reported in May, following Trump’s formal withdrawal from the Obama-era nuclear deal with Iran, both Iran and Russia have held discussions over cooperating to use cryptocurrency in bilateral trade.
“They share our opinion,” Iran’s Parlimentary Commission of Economic Affairs chief Mohammad Reza Pourebrahimi revealed after a meeting with the Russian Paliament’s Committee on Economic Policy.
“We said that if we manage to promote this work, then we will be the first countries that use cryptocurrency in the exchange of goods,” the official said at the time.
Iran’s agenda to develop its national cryptocurrency was first revealed by the country’s Information and Communications Technology (ICT) minister Mohammad-Javaz Azari publicly in February this year. Come May, the minister confirmed an experimental model of the cryptocurrency project was ready.
Iran’s Informatics Services Corporation (ISC) a central bank-affiliated body, revealed has notably revealed that the cryptocurrency is backed by the fiat currency Rial and is developed using open-source Hyperledger Fabric technology, the blockchain framework initially developed by IBM and New York-based industry startup Digital Asset. The Hyperledger Fabric is now code hosted by the Linux Foundation, which also leads the Hyperledger blockchain consortium.
The ISC has also revealed a roadmap for the cryptocurrency wherein the digital rial token is to be used as an interbank payment instrument in the first phase of its release before it integrates into society as a local payment medium in Phase Two.
Featured image from Youtube/ali javid.
Last modified: May 20, 2020 2:35 PM UTC