Authorities in Iran are preparing to allow cryptocurrency to be used for international settlements. According to local media, the central bank and government officials gave the green light to adopt the mechanism for using digital currencies in the field of foreign trade.
Companies in Iran should be able to pay foreign partners through cryptocurrency
Local media reported that Iranian companies will be allowed to use cryptocurrency in settlements with partners in other countries. An agreement has been reached for this purpose by the Central Bank of Iran (CBI) and the Ministry of Industry, Mining and Trade. Quoting the Financial Tribune, the head of Iran’s Trade Promotion Organization, Alireza Peyman Pak declared:
We are in the process of finalizing a mechanism for system operations. This should provide new opportunities for importers and exporters to use cryptocurrencies in their international transactions.
According to the Iranian news agency IBENA, Pak, who is also the Deputy Minister of Commerce, took to social media to provide details about the first meeting of the joint foreign exchange working group between his ministry and the Central Bank of Iraq. Participants agreed on a number of measures to facilitate Iran’s foreign trade, including the adoption of a cryptographic mechanism.
A follow-up report quoted the same official as saying that the Commerce Department will draw up a plan within two weeks to use locally mined cryptocurrencies and metals acquired by private companies to pay for imported goods. The initial proposal comes from the Central Bank of Iran.
Pak emphasized that cryptocurrencies and blockchain systems have many practical applications and if Iran ignores them, it will lose business opportunities. “In some of our target markets, especially in countries like Iraq, Afghanistan or Pakistan, there may be restrictions on the use of cryptocurrencies, but in our main markets such as Russia, China, India and Southeast Asia, the use of cryptocurrencies is common,” he said.
Besides mining, which was legalized in 2019, the crypto space in Iran remains largely unregulated. In April, the Central Bank of Iran (CBI) authorized local banks and exchange companies to use locally minted digital currencies to pay for imports into the sanctioned country. However, Tehran authorities have been hunting down cryptocurrency trading and payments in the country.
Cryptocurrencies are increasingly popular in the Islamic Republic, where as many as 12 million Iranians hold one currency or another, according to a recent estimate. Some officials opposed restrictive policies, insisting that these policies might drive innovations underground. Iranian fintech firms warned in May that the restrictions would deprive the nation of opportunities, noting that local firms had managed to bypass the economic blockade through crypto transactions.
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