Iran made its first official import order using cryptocurrency this week, a move that could enable the Islamic Republic to circumvent U.S. sanctions that have crippled the economy, according to Reuters.
In fact, knowing that the country is under U.S. sanctions and has now traded using cryptocurrency, this will sure add more pressure to the blockchain and crypto space, as more regulations will be put in place. This move has definitely facilitated trading for Iran, however, tightening regulations will most probably follow.
The order, worth $10 million, was a first step towards allowing the country to trade through digital assets that bypass the dollar-dominated global financial system and to trade with other countries similarly limited by U.S. sanctions, such as Russia. The agency didn’t 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 target countries,” an official from the Ministry of Industry, Mine and Trade said on Twitter.
The United States imposes an almost total economic embargo on Iran, including a ban on all imports, from the country’s oil, to banking and shipping sectors.
Last year, a study found that 4.5% of all bitcoin mining was taking place in Iran, partly as a result of the country’s cheap electricity. The mining of cryptocurrency could help Iran earn hundreds of millions of dollars that can be used to buy imports and lessen the impact of sanctions.
Cryptocurrencies such as bitcoin are highly volatile and have not found a widespread footing for payments.
The European Union on Monday said it put forward a “final” text to revive the 2015 Iran nuclear deal as four days of indirect talks between U.S. and Iranian officials wrapped up in Vienna.
Under the 2015 agreement, Iran curbed its nuclear program in return for relief from U.S., EU and U.N. sanctions. But former U.S. President Donald Trump reneged on the nuclear deal in 2018 and restored harsh U.S. sanctions, prompting Tehran to start violating the agreement’s nuclear limits about a year later.
It is also important to note that no one really knows whether this trading process has been going on for a while. Nonetheless, now that the word is out, one can only wonder why Iran made it public, a question worth keeping in mind.