Iran, Russia May Use Cryptocurrencies to Dodge International Sanctions

  • As Iran risks facing increased US Sanctions, it entertains the use of cryptocurrencies to avoid them
  • An Iranian MP reportedly proposed Russia a joint venture to do so.

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."

Juan Villaverde

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."

Mohammad-Reza Pourebrahimi

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.

Ripple-Backed Crypto Rental Startup Omni Ending Operations

Michael LaVere
  • Crypto rental startup Omni is closing for good after selling its engineering team to Coinbase.
  • Omni was one of the first major investments made by Ripple through their Xpring fund. 

Omni, one of Ripple’s first major investments through their Xpring fund, is ending its operation. 

In a letter posted to the company’s website, Omni thanked supporters of its crypto rental service and explained its decision to close for good,  

Since 2014, we’ve been committed to giving you access to the things you need when you need them, encouraging communities to share more and buy less. We’ve been honored to work with small businesses and the communities they serve.

The letter continues, 

After deep consideration, we’ve made the difficult decision to close our platform and end operations.

The San Francisco-based startup operated as a peer-to-peer rental service using crypto and blockchain. The company made headlines as one of the first major investments by Ripple’s Xpring, which operates as a fundraising and development fund for innovative crypto-based projects. 

In October, it was reported that Coinbase had entered negotiations to acquire Omni’s engineering team for its Coinbase Earn program, with no interest in the base rental service. The acquisition followed reports that Omni had struggled to generate an adequate revenue stream despite Ripple’s investment and was on the verge of closing. 

Featured Image Credit: Photo via Pixabay.com