Cryptocurrency has been sparking concerns globally. From hacks and scams to the simple fact that it’s a hugely volatile asset, there are many reasons governments want to protect their citizens in one way or another. But there’s another thing driving this global interest — the increasing likelihood of crypto sneaking into foreign affairs. Today’s Iran crypto news is a great case in point.
Sanctions have long-existed as a punishment in international relations; countries that implement sanctions on other countries do so to fiscally cripple their target. Typically, sanctions come with some sort of demand and are lifted only when the sanction target agrees to certain terms.
However, this isn’t always a technique that works. For example, the United States’ relationship with Cuba is extremely sanctions-heavy. Attempting to push Cuba away from its socialist form of government, the U.S. has banned all imports to the nation. Yet, even with these hefty sanctions in place since 1960, Cuba has retained its form of government and exported goods through European companies.
Countries can become pretty savvy when faced with sanctions — and there’s a fear among U.S. policymakers that crypto will only help these efforts. When Russia invaded Ukraine early this year, the U.S. and a host of European countries began sanctioning the nation. However, fear began spreading over whether the country would use digital assets to subvert sanctions, leading to bills meant to curb this possibility.
Russia doesn’t appear to actually be turning to crypto to dodge sanctions, but these fears seem to have inspired others. This week, Iran is beginning its own crypto-fueled sanctions evasion campaign.
Iran Crypto Imports Help to Avoid U.S. Sanctions
This week, reports show evidence of crypto transactions by Iran to pay for imports into the country. This Iran crypto news makes for one of the first instances of a country subverting sanctions via cryptocurrency.
The Iranian government placed this import order for a price of $10 million. As of right now, it’s unclear which crypto the government used. The purchase comes after the Iranian government amended its crypto legislation to allow imports to be funded with locally mined cryptocurrency.
Iran’s Ministry of Industry, Mine and Trade suggests that this purchase is just the first of many. “By the end of September, the use of cryptocurrencies and smart contracts will be widely used in foreign trade with target countries,” an official said according to Reuters.
With this in mind, the U.S. government is going to have to rethink its sanctions strategy around Iran. Little exists in the way of crypto legislation as of yet. Rest assured, though, policies bridging sanctions with crypto will be of the utmost priority in the wake of this news.
It’s worth noting that Iranian citizens have been interacting with the crypto market for a while leading up to today’s news. U.S. crypto exchange Kraken has knowingly served some 1,500 Iranian users in recent years, a direct violation of sanctions. Global crypto exchange Binance (BNB-USD) has also knowingly served this user base.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.