Iran Places Its First Crypto-Funded Import Order
Iran has made its first official import order using cryptocurrencies, according to a report by Reuters. A move like this could enable the Islamic Republic to circumvent U.S. sanctions that have left its economy crippled.
The order, reported to be worth $10 million, was taken as a first step towards allowing the country to trade via digital assets that bypass the dollar-dominated global financial system, and to allow it to trade with other countries that are similarly limited by U.S. trade embargoes such as Russia. It has not been made clear which cryptocurrency has been used in the transaction. An official from the Ministry of Industry, Mine and Trade said on Twitter,
By the end of September, the use of cryptocurrencies and smart contracts will be widely used in foreign trade with target countries.
Iran has been subject to an almost total economic embargo from the U.S. including a ban on all imports, including those from the country’s oil, shipping and banking sectors. Tehran, Iran’s capital city, is one of the largest economies yet to embrace cryptocurrency technologies.
However, a study conducted last year found that 4.5% of all bitcoin mining takes place in Iran due to the country’s cheap electricity. Cryptocurrency mining could help the country earn hundreds of millions of dollars that can be used to mitigate the impact of the U.S. trade sanctions. In 2019, the government legalised cryptocurrency mining in the country, and it still strictly regulated the sector. It cracked down on local miners last year over its energy use.
Earlier this week, the European Union said it put forward a “final” text to revive the 2015 Iran nuclear deal following four days of indirect talks between the U.S. and Iranian officials. Under this agreement, Iran agreed to curb its nuclear program in return for relief from U.S., EU, and U.N sanctions. Former U.S. President Donald Trump however reneged on the deal in 2019 and restored harsher U.S. sanctions, prompting the capital to violate the agreement’s nuclear limits less than a year later.
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