Unlike The Petro, Iranian Crypto Rial Could Be A Success

Unlike The Petro, Iranian Crypto Rial Could Be A Success
ôîòî ïîêàçàíî ñ : cryptobriefing.com

2019-3-4 21:58

Things look bleak for the Islamic Republic of Iran again. Sanctions reimposed by Donald Trump are likely to put pressure on an economy that has been performing well in recent years. Iran’s gross domestic product (GDP), which had steadily risen from $375bn in 2015 to $430bn in 2017, is predicted to drop by more than $100bn in 2019. And in the past five years, the value of the Iranian rial against the dollar has almost halved, falling from $0.000040 to $0.000024.

Economic instability may be on its way, but a sovereign digital asset – which the regime is said to be seriously considering – may offer a softer landing than the U.S government would like to see.

Iran’s proposed gold-backed cryptocurrency, dubbed the ‘crypto rial’, could even be a surprising success.

What is the crypto rial?

The world first heard reports Iran was developing a sovereign cryptocurrency last summer. But there was little news for more than seven months until late January, when the Central Bank of Iran released an early draft of a bill that would lift the nation’s blanket ban on cryptocurrencies, whilst maintaining certain restrictions.

Then a week later, in early February, Iran unveiled plans for a crypto rial, to be backed by the country’s gold reserves. The government announced that more than a billion tokens would be minted, issued by four of the country’s largest banks. Users would also be able to see the reserves themselves, with a video link to footage of the reserves around the clock.

A report by digital asset security firm CipherTrace said there would be clear benefits for the Iranian regime and economy if it was to issue a state-backed cryptocurrency. According to CipherTrace, what is effectively a gold-backed stablecoin could arrest the declining value of Iran’s national currency.

But it will also potentially allow Iran to bypass economic sanctions; lead to the establishment of an alternative monetary zone outside of the West’s influence; and even bolster the regime’s standing within the country. 

“We conclude that such a currency and the regulations that Iran is proposing, will in fact, result in a flourishing cryptocurrency,” the analysts wrote in the report. 

What are the key benefits?

Crypto Briefing reached out to the analysts behind the CipherTrace report. CEO David Jevans said Iran’s crypto real is “clearly” motivated by its attempts to evade sanctions.

Over the phone, Jevans explains that it would be a simple matter to get it listed on exchanges without KYC-AML requirements. So long “as they get other people to use it” – which is where a stable value backed by gold may come in – Iran could easily convert crypto-rial into a popular cryptocurrency, such as Bitcoin (BTC) or Ether (ETH), which are tradeable worldwide.

“This is a major use-case; crypto has already been used to get cash out of the country,” Jevans says. “People want liquidity and the ability to move money where they want it.”

A change of hands through friendly countries, such as Russia or even China, would allow value to essentially bypass any sanctions placed explicitly against the regime. Through a monetary backdoor, Iran could access the global market, mitigating the effects of sanctions.

But there are additional benefits to the country’s leaders. It would release Iran from an over-reliance on SWIFT – the Society for Worldwide Interbank Financial Telecommunication – which since the 1970s has been the payment network for transactions between financial institutions around the world.

As Jevans points out, this is not a “bottom-up” movement. There are still few details available but the regime would essentially be in control of the blockchain. It could potentially track every single transaction taking place in and outside of its borders if the crypto rial were to catch on.

“Although they [Iran] would not rely on a centralized system such as SWIFT, allowing the people to do more,” Jevans explains. “It would have much greater surveillance. The state can survey the blockchain far easier.”

How is it better than the Petro?

The crypto rial isn’t the first attempt to create a sovereign virtual currency, nor is it the first to try and evade sanctions. Last year Venezuela attempted to launch its own ‘Petro,’  backed by the country’s oil reserves, as a way to circumvent US-imposed sanctions and stabilize the economy.

But so far, the grandiose claims enshrined in the whitepaper haven’t converted into a strong user-base or monetary alternative. The idea of a ‘sovereign cryptocurrency’ raised eyebrows when the Petro was first unveiled in December 2017. Its subsequent demise confirmed doubts about sovereign cryptocurrencies.

But CipherTrace argues Iran’s attempt may be more successful. Despite protests, the regime is far more stable than the one in Venezuela and has adapted to functioning under imposed sanctions – the US has had some sort of economic embargo ever since the 1970’s.

Diplomatically speaking, Iran is nothing like Venezuela. It enjoys strong relationships with some countries in the region and has begun to foster new alliances with rising powers outside of the West’s orbit, such as China.

“Iran is less isolated and has more ability to get Paymon [crypto rial] out of Iran and exchange it for other cryptocurrencies,” Jevans wrote in a follow-up email.  “They signed a trilateral blockchain cooperation agreement with Russia and Armenia. Iran is also building alliances with China and other European countries.”

Is it for rial?

The crypto-rial will not be the first gold-backed stablecoin. The Digix project has a DGX token which is backed by 1 gram of gold held in a vault in Singapore. When we spoke to the team just over a month ago, they were looking to expand, as demand for gold tokens was beginning to exceed the amount held in reserves.

There’s a clear market for gold-backed tokens. What influences the price of gold is often independent of the factors that influence the traditional markets – many people use gold as a hedge against the global economy.

This is good news for Iran. The government could have a ready market for their tokens, which will make initial expansion far easier. It will allow the regime to evade sanctions and give it the reins to a global, liquid virtual asset, that may act as a key inroad for businesses and individuals looking to trade in the country.

The crypto rial could be a real success story – just maybe not the one we were expecting.

 

The author is invested in digital assets, including BTC and ETH which are mentioned in this article.

Join the conversation on Telegram and Twitter!

The post Unlike The Petro, Iranian Crypto Rial Could Be A Success appeared first on Crypto Briefing.

Similar to Notcoin - Blum - Airdrops In 2024

origin »

Emerald Crypto (EMD) íà Currencies.ru

$ 0 (+0.00%)
Îáúåì 24H $0
Èçìåíåèÿ 24h: 0.00 %, 7d: 4.67 %
Cåãîäíÿ L: $0 - H: $0
Êàïèòàëèçàöèÿ $0 Rank 99999
Öåíà â ÷àñ íîâîñòè $ 0.0016036 (-100%)

crypto unlike iran success could iranian petro

crypto unlike → Ðåçóëüòàòîâ: 96


Ôîòî:

Elections Canada Consults With Political Parties on Crypto Donations

According to Elections Canada, the agency that runs federal elections in Canada, there has been “a growing interest” in cryptocurrency donations. This trend has prompted some political parties to ask for a ruling on how best to manage bitcoin and other cryptocurrency political donations and how to navigate the various reporting systems required by both Elections Canada and the parties so that they comply with the Canada Elections Act.

2019-1-24 20:28


“Crypto King”: Bear Market Aside, Bitcoin (BTC) Still Has Inherent Value

Again, as Bitcoin fell into Tuesday, with the popular digital asset establishing a new year-to-date low (yet again) at $4,200, proponents of this nascent innovation quickly took to its side. Unlike the unexpected appearance of Stephen Palley, a crypto-friendly lawyer at Anderson Kill, on Bloomberg TV, this time, CNBC Fast Money brought on Bart “Crypto.

2018-11-21 16:00


FICE: First Islamic Crypto Exchange by ADAB Solutions to Launch Next Year Using Halal Coins

Many Islamic countries, unlike its Western counterparts, have no separation between Church and State. This means that the Shariah, the religious law, is very important in most of these countries. Because of this, ADAB Solutions, a project based in the United Arab Emirates, is planning to launch the First Islamic Crypto Exchange (FICE). This exchange will […]

2018-10-31 01:42


Instant Fiat and Crypto Swaps – How some banks are bridging the gap for users- VICTORIEUM

Cryptocurrency runs on a blockchain technology which is a decentralized platform – unlike Traditional banking sectors. Cryptocurrencies are playing a huge role in day to day financial transactions but the traditional banks are imposing several rules and regulations that are stopping from fiat to cryptocurrency swapping and vice versa.

2018-10-15 16:22


Ôîòî:

How Monero Are Improving Human Rights With XMR

 Listen Here – https://soundcloud. com/cryptodaily/how-monero-are-improving-human-rights-with-xmr Monero is considered to be the privacy coin, the currency of choice for absolute privacy. Now, privacy doesn’t necessarily mean security and we should remember that 2018 has seen a tonne of ‘Monero mining’ hacks, calling into question some of the projects integrity.

2018-10-12 17:00