U.S. sanctions caused severe financial problems for Iran. In the last two years as a result of sanctions, the Iranian economy declined by 10-20%. The country is trying to evade the U.S., and it is not an easy task for several reasons. However, Iran started to use cryptocurrencies to minimize the damage caused by the sanctions.
Iran regards Bitcoin, the largest cryptocurrency in terms of market capitalization as one of the solutions to move around the sanctions.
This Middle Eastern country is not alone when it comes to using cryptocurrencies to cope with the harsh impact of U.S. sanctions. For example, Venezuela is also interested in crypto money. Moreover, Venezuela even created a state-backed digital currency called Petro.
Countries around the world start to realize the importance of cryptocurrencies. China is working on national digital currency. It has the chance to become the first major superpower to launch a digital currency.
Moreover, according to the information “Belt & Road Initiative” may include a blockchain component with Ethereum. As a result, China will have the opportunity to trade with other BRI countries such as Russia and Iran, using digital assets. This way countries that are under U.S. sanctions will evade the entire U.S. global reserve currency model.
Cryptocurrencies and Possible Solutions
The situation regarding the cryptocurrencies is complicated. On the other hand, this technology is so powerful that the U.S. considers cryptocurrency as a national security threat. On the other hand, cryptocurrencies have the potential to make life easier for millions of people.
One of the solutions is to create economic sanctions that would cover a world of cryptocurrency. Cryptocurrency and blockchain advocates should consider this option. As a result, U.S. authorities will have the ability to block crypto transactions connected with Iran and other countries. The U.S. authorities will change their attitude regarding this topic as it will become harder to use crypto for illegal activities.