Iran Approves Use Of Cryptocurrency For Imports

Iran has officially approved the use of cryptocurrency for imports as a measure to circumvent US sanctions imposed on its finance and banking sector. Industry, Mines, and Trade Minister Reza Fatemi Amin said on Monday that the regulations for using cryptocurrencies instead of dollars and euros were finalized by the administration on Sunday.

The use of cryptocurrencies in imports is one of the ways to circumvent sanctions.

Earlier in the month, Iran made its first official import cryptocurrency order, worth $10 million, as a test runs for allowing the country to trade through digital assets that bypass the dollar-dominated global financial system and to trade with other countries similarly embargoed by US sanctions, such as Russia.

"By the end of September, the use of cryptocurrencies and smart contracts will be widely used in foreign trade with target countries," said Alireza Peymanpak, a deputy Iranian trade minister who leads Iran’s Trade Promotion Organization (TPO).

In 2019, Iran’s central bank banned the trading of cryptocurrencies inside the country but the government allowed the use of cryptocurrencies like bitcoin to pay for imports.

Potential US and EU response?

Cryptocurrency's reputation for enabling transactions outside of the traditional financial ecosystem has already prompted concerns that it may serve as a tool for countries like Russia and Iran to evade promulgated sanctions against them. Although federal regulators have made clear that they will work to prevent attempts to circumvent sanctions using cryptocurrencies, their ability to identify and interdict cryptocurrency transactions remains limited.

This new Iranian law may trigger a revival of the hawk of regulations in the USA and the European Union. Which most likely have an important impact on the markets.

It's still unclear how exactly the US and EU policymakers will deal with this new kind of threat. Especially with the limited amount of control the government can have over DEFI. Although we saw a couple of weeks ago the sanction on tornado cash by the US treasury.https://home.treasury.gov/news/press-releases/jy0916