An interesting situation is taking place in Iran as of right now. Although it is not a situation that favors the Iranian people, the overall trend is quite remarkable. Due to President Trump’s recent decision to renege on the Iran nuclear deal, growing numbers of Iranians are now looking to get money out of the country via Bitcoin. It’s an interesting occurrence, considering how Iran is also working on its own cryptocurrency.
The Future of Cryptocurrency in Iran
Nothing less than financial turmoil is taking place in Iran right now. With the United States choosing not to renew its nuclear deal with the country and imposing the “highest level of sanctions”, a lot of people are genuinely concerned about the future. As such, moving money out of the Iranian financial system has become a top priority for a lot of people. That is easier said than done, as the country has been all but isolated in this regard.
It has to be said that the Iranian government was well aware that President Trump could renege on the deal and impose new sanctions. To counter this potential threat, the government greenlighted an effort to develop a national cryptocurrency. Although this development is still ongoing, it remains to be seen if such a currency will ever see the light of day. Moreover, there is no guarantee such a cryptocurrency will be successful in the long run.
If Venezuela’s Petro is an example, Iran’s cryptocurrency may not become a new currency to be used by the general population. Instead, it may be a tool allowing the government to bypass any imposed sanctions and still conduct business on a global scale. Despite the best efforts by Venezuelan President Maduro, the Petro still hasn’t become a big success several months later. In fact, it is still a questionable currency which doesn’t even have the full support of the government.
While there is some merit to creating a national cryptocurrency backed by tangible assets, it seems Bitcoin is still quite popular. In fact, a lot of Iranians are flocking to real cryptocurrencies as a way to move money out of Iran right now. The decision by President Trump has made exchanging Iranian currency for any other fiat currency a bit problematic. Additionally, the value of the rial is dropping at an alarming rate, which makes the search for an alternate store of value all the more important.
It appears LocalBitcoins is quickly gaining a lot of popularity in Iran as of right now. Such a peer-to-peer marketplace to buy and sell Bitcoin provides a solution for people looking to get money out of Iran without going through centralized entities, exchange rate scalpers, and so forth. Unlike other currencies out there, Bitcoin and its cohorts allow money to be transferred globally, without permission.
Whether or not local interest in Bitcoin will continue to rise is a different matter altogether. For people moving funds out of Iran, it is the most viable option despite its somewhat complex nature. Unfortunately, the accelerating inflation of the rial may make it impossible for some people to even buy Bitcoin at an affordable rate in the coming weeks.