With the aftermath of a breakdown in talks over a US-Iranian nuclear agreement, Iran may see the return of US sanctions. An Iranian MP has reportedly proposed a joint venture for Iran and Russia to use cryptocurrencies as a workaround to any potential economic sanctions.
The initial idea was proposed by the head of the Iranian Parliamentary Commission for Economic Affairs, Mohammad-Reza Pourebrahimi, during a meeting with Russia's Chair of the Federations Council Committee on Economic Policy, Dmitry Mezentsev.
Since the break-off of discussions between Iran and the US, Iran’s Rial has been declining, as it dropped to a low of 50,000 IRR per USD. The Iranian public, according to Weiss Cryptocurrency Ratings analyst, Juan Villaverde, has been put into a state of panic.
"Millions of Iranians are panicking. They fear not only renewed sanctions but also economic collapse and financial repression. Many more are scrambling to find a safe refuge for the little money they have left."
Cryptocurrencies offer both countries a unique alternative to previous methods. They provide far faster transactions than SWIFT’s interbank payments system, which sanctioned countries can get cut off from.
As covered, Iran has turned its back on bitcoin and other cryptocurrencies earlier this year, and decided to create its own local cryptocurrency, of which an experimental version is said to already have been developed.
Pourebrahimi has also announced that closer collaboration with Russia is in the interest of both nations. He claims to have entered discussions with Russia's State Duma's Committee on Economic Policy about a cooperative cryptocurrency initiative.
“They [Russia] share our opinion. We said that if we manage to move this work forward, then we will be the first countries that use digital currencies in the exchange of goods."
Mezentsev has also claimed there’s a need for the two countries to collaborate, stating that “interbank relations between our countries should be of great importance,” in the wake of sanctions being aimed at both.
Cryptocurrencies have fast grown in popularity amongst people in Iran. According to a local online news website, Iranians have purchased over $2.5 billion worth of cryptocurrency over the last few years, despite a recent ban that bars commercial banks from dealing with cryptocurrencies.