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Right after Washington’s move to impose sanctions that will restrict Iran’s access to US currency, reports came out that Tehran is speeding up the project to develop a national cryptocurrency. Officials in the Islamic Republic believe the state-issued coin could help circumvent the restrictions imposed by the Trump administration.
Iran to Evade US Sanctions Using Own Crypto
Faced with renewed US sanctions, Iran is accelerating the development of its national crypto as the oil-rich nation is looking for ways around the American restrictions. Despite calls from partners and signatories to the Iran nuclear deal, like the EU, Russia and China, Washington reimposed measures targeting the ability of the Islamic Republic to acquire US dollars and trade in precious metals. The United States urged allies to cut all purchases of Iranian oil and president Trump warned that the sanctions will “ratchet up to yet another level” in November.
Following the news from Washington this week, media reports from Tehran suggested that the Iranian government is now serious about stepping up efforts to finalize the project for an indigenous cryptocurrency. On Wednesday, a day after the Trump administration restored the sanctions, a high ranking Iranian official revealed that President Hassan Rouhani had ordered the country’s central bank to hold a meeting with other relevant authorities to discuss the matter. They are expected to assess the progress in the development of Iran’s digital money at a time when the fiat Rial is plunging.
According to Iranian English language channel Press TV, the announcement was made by the Minister of Information and Communications Technology, Mohammad-Javad Azari Jahromi, whose department will jointly chair the meeting with the Central Bank of Iran (CBI) scheduled to take place next week. Jahromi noted that the preliminary studies had been carried out already by Iran’s Post Bank, which was charged with overseeing the crypto project.
The CBI, however, is still opposed to the idea of using digital currencies and considers them illegal in Iran. Nevertheless, the minister hinted that this attitude could soon change claiming that the mentality within the Iranian government is currently in favor of cryptocurrencies. Speaking to reporters, he stated:
A new attitude that has been created in the government is that the digital money does not necessarily pose a security threat and can create opportunities for the country.
Post Bank, which is building the Islamic Republic’s electronic payment system, is heading the efforts to develop Iran’s state-sponsored crypto. The financial institution is preparing to hold a tender for the project and all Iranian tech experts have been invited by minister Jahromi to take part in its realization. Post Bank’s governor Khosrow Farahi told IRNA that a comprehensive document on the creation of the Iranian coin, which takes into account all social and economic considerations, is ready to be presented next week.
Changing Attitudes Towards Cryptocurrencies
The latest update on Tehran’s plans in the crypto space comes after a high-ranking Iranian lawmaker said in July that Iran might employ cryptos as part of its efforts to circumvent the upcoming US sanctions. Cryptocurrencies are one of the major mechanisms Iran can use to evade the new sanctions and get rid of the dollar hegemony, Mohammad Reza Pour-Ebrahimi, chairman of the parliamentary Economic Commission, said in an interview with Mizan.
Pour-Ebrahimi’s comments were followed by a statement from the deputy for management and investment affairs at the Directorate for Scientific and Technological Affairs of the Presidential Office, Alireza Daliri, who was quoted by ISNA saying that his department already has a plan to create a national cryptocurrency.
By all indications, the restoration of US sanctions has played a role in changing the attitude of Iranian authorities towards cryptocurrencies, as officials have previously called them unreliable and risky, while the CBI tried to prevent their use. In April, the central bank issued a statement effectively banning financial institutions from dealing in cryptocurrency. At the same time, however, the Information and Communications Ministry continued its work on creating a legal framework for the fintech industry and CBI was part of this effort.
What are your expectations about the project to create an Iranian national cryptocurrency? Do you think state-issued coins can help countries like Iran evade sanctions? Share your thoughts on the subject in the comments section below.
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Communities in two countries, which share a border, history and perspectives, have expressed similar views about the future of the cryptocurrency sector. A new association in Croatia hopes to lay the foundations of self-regulation in the industry. In neighboring Slovenia, entrepreneurs and government officials have promised to work together to “educate the public” on the benefits of the blockchain technology.
Croatian Crypto Companies to Advise Regulators
Businesses and enthusiasts in Croatia have united their efforts to help authorities take informed decisions about the cryptocurrency sector. A new umbrella organization will be bringing suggestions and important matters to the attention of policy makers in Zagreb, Bitfalls reported this week. The Blockchain and Cryptocurrency Association will be advising regulators on anything from buying and selling cryptocurrencies, to crypto payments and salary payouts in bitcoin.
UBIK [“Udruga za Blockchain i Kriptovalute”] intends to create “a focused and strong community of people involved with the blockchain technology and the domain of cryptocurrency in Croatia”, but also in the region. Providing relevant information, education and knowledge about the crypto economy is among its priorities. The Croatian crypto association plans to help authorities and its members with legal, financial, and technological support in the development of the regulatory framework and realizing strategic blockchain projects.
Interest in bitcoin, other cryptocurrencies and the underlying technology has grown significantly in Croatia in the past year that saw skyrocketing prices on crypto markets. The local community has expanded with new companies working with blockchain technologies and more businesses accepting crypto payments.
A comprehensive regulatory policy is yet to be adopted by Croatian authorities. During a discussion on digital currencies back in 2013 the Croatian National Bank reportedly stated that bitcoin was not illegal in the country. More recently, in 2017, HNB noted that cryptos were neither legal means of payment, nor electronic money under current law in Croatia. The country has appealed for common EU decisions in regards to cryptocurrencies.
Government and Businesses to Educate Slovenians about Blockchain
More positive signals came this month from Croatia’s neighbor Slovenia, another former Yugoslav republic and current member of the EU. Government officials and blockchain companies promised to work together to “educate the public on the benefits and the opportunities that the innovative technology brings”. They met to set up an open dialogue between authorities and entrepreneurs, necessary to clarify and address the challenges. Slovenian Prime Minister Miro Cerar also took part in the meeting hosted by Viberate, a startup developing a decentralized live music marketplace.
“We have called for regulation that would assist blockchain projects with existing financial limitations and allow us easier recruitment processes. The government has agreed that it will provide us with more favorable conditions in due time”, Insurepal, one of the participating companies, said in a blog post. It expressed hope that similar public discussions will help Slovenia become one of the most advanced countries in the field of blockchain.
The companies, which took part in the meeting, also announced the establishment of the Blockchain Alliance CEE. It will focus their efforts on improving visibility and raising the reputation of the sector through unified communication.
The current government in Ljubljana has a positive attitude towards the crypto industry. Speaking at the Digital Slovenia 2020 conference last year Prime Minister Cerar acknowledged the progress made by local businesses and said his country could become a leader in blockchain-development in the European Union. Slovenia is also among countries that do not tax individuals on capital gains from bitcoin and other cryptocurrencies.
Do you think positive developments in Southeast Europe in regards to crypto regulation will influence decisions in the EU? Share your thoughts in the comments section below.
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