Iran Concludes $10 Million Import Using Crypto. US Sanctions Dead?

Iran Concludes $10 Million Import Using Crypto. US Sanctions Dead?

Iran recorded its first formal order for the import of goods valued at $10 million and paid for in cryptocurrency, marking a historic defining moment in the usage of cryptocurrencies. The Ministry of Industry, Mine and Trade says the country intends to employ cryptocurrencies extensively in its international trade with target countries, according to a local Iranian news source.

Iran Turn Towards Crypto For International Trade

According to a source from the Ministry of Industry, Mine, and Trade, Iran imported its first goods using bitcoin, as reported by the regional news outlet Tasnim. This week’s import involved the use of cryptocurrency valued at $10 million in goods. Iran anticipates expanding the use of cryptocurrency and smart contracts for international trade in the future.

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Taking to Twitter on August 8, Alireza Peymanpak—Vice Minister of Iran’s Ministry of Industry, Mine and Trade—noted the operation.

“This week, the first official import order was successfully placed with #cryptocurrency worth 10 million dollars,”

Peymanpak said, in a tweet translated from Persian.

Iran began importing cryptocurrency just one month after the United States imposed fresh sanctions on the Middle Eastern nation as part of its efforts to revive the 2015 nuclear accord with Tehran. According to the U.S. Department of Treasury, the additional measures were designed to go after “an international network of individuals and entities” who are thought to have sped up the export of Iranian petroleum and petrochemical goods to East Asia in violation of American sanctions.

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Iran is promoting the use of cryptocurrencies by using them to pay for imported goods. Due to the country being subject to economic sanctions, the Ministry of Industry, Mine, and Trade is willing to pay for imported goods using cryptocurrencies, which has raised uncertainties.

The country had been preparing for this approach for some time. Reports of a review of Iran’s cryptocurrency laws arose in October of 2020. The country’s cabinet members moved to change the country’s crypto legislation to allow exclusive usage of crypto for import transactions. This came at a time when the country’s foreign currency reserve had dried up due to US restrictions.

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In August of last year, the Central Bank of Iran (CBI) stated that banks and authorized currency exchangers could use cryptocurrencies extracted in Iran by authorized crypto miners to pay for imports.

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In 2019, the Iranian government authorized the industry of cryptocurrency mining. The Ministry of Industry, Mine, and Trade granted nearly a thousand licenses for cryptocurrency mining operations in January 2020.

Iranian authorities, however, claimed that some unlicensed miners were using household electricity for cryptocurrency mining, which was having a significant negative impact on the nation’s electricity industry. Licensed cryptocurrency miners were repeatedly told to stop working in order to avoid outages. According to reports, in September of last year, officials nationwide broke down about 6,000 illegal crypto mining farms and seized over 220,000 mining equipment.

A representative of Iran’s Power Generation, Distribution and Transmission Company (Tavanir) stated in April of this year that the administration of the nation will implement new regulations to toughen the penalties for illegal cryptocurrency mining.

Related Reading: Iran to Shut Down Crypto Mining Farms As Energy Crisis Deepens

US Sanctions Has Forced Iran’s Hand

The US has imposed many sanctions on Iran since 1979. These penalties would be in relation to the nation’s economic, military, trade, and scientific endeavors. The United States imposed sanctions as a result of Iran’s sponsorship for a number of entities that it viewed as terrorist organizations. This is in addition to the famed nuclear program of the nation.

Iran’s interest in cryptocurrencies is predictable given the US sanctions, as these assets are not under US jurisdiction. ICCIMA created the Iran Blockchain and Cryptocurrency Association last year (IBCA). IBCA was tasked with coming up with answers to Iran’s blockchain-related problems.

Iran has been attempting to use currencies other than the US dollar to get around the US restrictions on its petroleum sales. Iranian Foreign Minister Mohammad Javad stated that countries were deciding to use their own currencies in bilateral trade and that the “actual mechanism would be to avoid dollars” during the Iranian mission to the United Nations in New York in 2018. In the same year, the U.S. Treasury identified Iranian financial cybercrime facilitators by using digital currency addresses.

Related Reading: Binance Under Fire: Report Says It Bypassed Sanctions And Continued To Serve Iranian Customers

Featured image from Shutterstock, chart from TradingView.com

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