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Could the US proposed blocking of Iranian accounts lead to a rise in Bitcoin use?

12 Jul, 2018
by Will Heasman
News
Could the US proposed blocking of Iranian accounts lead to a rise in Bitcoin use?

The US ambassador to Germany has urged the government to stop Iran withdrawing 400 million euros in cash, in order to elevate sanctions placed by the US. However, If proposed blocks are agreed by Berlin, the Iranian people could still circumvent sanctions using crypto.

Due to the announcement of the US pulling out of the nuclear deal with Iran, the country's economy has taken a dive. Analysts were quick to point out that due to this, many Iranians have been feeling to cryptocurrencies thanks to its relative status as a safe haven. One such analyst Juan Villaverde who works for Weiss cryptocurrency ratings explained in a blog post that cryptocurrencies are effectively acting as traditional safe-haven assets:

“In the past, when corrupt governments devalued their local currency or seized assets from citizens, investors ran to the US dollar or gold. […] Today, many are moving into cryptocurrencies, where their money sits on a global distributed ledger that no central bank or government can touch.”

However, it seems the Iranian government is all too aware of the impacts of its citizens fleeing to crypto, as it banned national banks from dealing with domestic exchanges, conversely eToro market analyst Mati Greenspan believes that cryptocurrencies can benefit from governmental crackdowns:

“[A crackdown in Iran] would create a secondary market for crypto assets within the economy, which—normally speaking—would have a very high markup compared to the asset’s price elsewhere in the world …So, there will be places where they’ll be able to trade peer-to-peer. They don’t need an exchange. Obviously, it’s a lot easier if you have a local exchange that accepts credit cards or bank transfers, but if that infrastructure’s not there, they can still trade it peer-to-peer.”.

Despite this crackdown from the government, it seems Iranian officials are discussing the possibility of cryptocurrency and its underlying technology to replace traditional banking systems and perhaps bypass the aforementioned sanctions.

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