The Cradle
Iran to legalize crypto payments to enter international trade
Officials say that Central Bank of Iran has worked for two years on researching and developing a platform and infrastructure for a domestic cryptocurrency
By News Desk - January 15 2022

(Photo credit: The Economic Times)

Residents and local merchants in Iran will be able to pay for goods and services using cryptocurrencies, according to a new report.

The Central Bank of Iran (CBI) and the Ministry of Industry, Mines, and Trade have reportedly agreed to allow the use of cryptocurrencies to facilitate transactions in Iran.

The approval was granted following a meeting between the CBI and the ministry.

This will open the door for corporations to reduce aggressive sanctions imposed on the country, lowering the weight of the international monetary and trade system that has put the Iranian economy at risk.

As such, merchants and business people will be able to conduct trade settlements and transactions without fear of punitive sanctions.

Since 2018, the US has imposed severe economic sanctions on Iran, which prohibit most banks, companies, and financial institutions from doing business with the Islamic Republic.

The head of Iran’s Trade Promotion Organization (TPO) announced the connection of the cryptocurrency system to the International Trading System to be used in international trade for the next two weeks.

Alireza Peyman Pak, Iran’s TPO chief, said that an entrepreneur must have financial, banking, monetary, and insurance mechanisms for trading with other parties.

Peyman Pak added: “We are finalizing a mechanism for operations of the system. This should provide new opportunities for importers and exporters to use cryptocurrencies in their international deals.”

“All economic actors can use these cryptocurrencies. The trader takes the ruble, the rupee, the dollar, or the euro, which he can use to obtain cryptocurrencies like Bitcoin, which is a form of credit and can pass it on to the seller or importer. […] Since the cryptocurrency market is done on credit, our economic actors can easily use it and use it widely,” he continued.

Meanwhile, Mehr News Agency reported that Iran’s domestic cryptocurrency is now in pilot mode.

Seyed Aboutaleb Najafi, head of IT services at the CBI broke the news, pointing out that China has been researching cryptocurrencies for about eight years.

He said: “The problem of the cryptocurrency project is not only the conversion of rials into digital form but also the economic, social, legal and risk dimensions, considering that this issue requires extensive studies.”

Najafi also emphasized: “In addition to the Central Bank, banks should also be active in this field; because they are the second layer of this process.”

He added that issuance of cryptocurrencies is made by the CBI, but as the CBI does not deal with society or customers; therefore banks, as the mediators, should start participating and serving customers by creating a wallet.