The crypto global war is heating up: Iran is still in line with its own currency backed by gold
The control of the US dollar and the global financial system that depends on it provide the US government with an incredibly powerful tool for shaping international affairs. As such, it is not surprising that its geopolitical rivals around the world are trying to exploit the invention of the cryptocurrency to bring the USD to parity. The latest example comes from Iran, which now wants to create a digital token backed by gold.
Central Bank of Iran approves gold-backed token
On Saturday, July 13, the Mehr news agency, based in Tehran, reported that the country’s first cryptocurrency issued with permission from the Central Bank of Iran (CBI) will be announced. This was according to an announcement by an official of the Chamber of Commerce, Industries, Mines and Agriculture of Iran, a non-profit institution established to facilitate economic growth and development in the country.
The official, Shahab Javanmardi, said the sovereign digital currency will be extracted by a consortium of Iranian private IT firms in accordance with the IWC agreement and also asked the government to issue regulations for the country’s cryptographic mining sector. He said that “the Iranian cryptocurrency is backed by gold, but its function is similar to that of foreign rivals.” In addition, he revealed that “money encrypted at the national level is to facilitate the optimal use of the frozen resources of Iranian banks.”
According to reports, Iran has been preparing to launch its own cryptocurrency for a long time. Last July, the state-controlled media also claimed that a large number of homegrown Iranian technology companies were developing such a project in cooperation with the CBI. At the same time, the Iranian government has also made it difficult for its own citizens to mine and market the cryptocurrency, with limited success.
Tools to circumvent US sanctions
Cryptocurrencies authorized by the government or even issued directly by central banks are not a new concept. Several countries around the world have floated the idea or have claimed that they have tested it in some capacity. It is known, for example, that Sweden is testing the creation of an e-krona, its version of the Central Bank’s digital currency (CBDC), with the help of private blockchain development companies. However, while the Scandinavian country is considering the measure due to its ability to support the transition to a society without cash and other economic factors, Iran’s goal for its own cryptography is very different.
By imposing economic sanctions on other nations, the US UU They can dissuade them from taking actions that disapprove or even bring an enemy country to its knees without firing a single shot. Iran has been on the receiving end of several US sanctions for decades and the development of the local cryptocurrency must be seen in this context. In short, the main objective of any Iranian digital asset will be to bypass the established banking and financial system to evade economic sanctions.
The main example of a cryptocurrency created specifically to elude financial sanctions is Venezuelan petro. Like the alleged Iranian token, it is also a digital asset backed by resources, only with oil instead of gold. When President Nicolás Maduro presented the petro to the public on television in December 2017, he said that he would allow the country to “move forward on questions of monetary sovereignty” and make available to Venezuela “new forms of international financing.”
In reality, these promises have not materialized until now and many consider the petro nothing more than a scam led by a corrupt government. Of course, it was not helped by the USA either. UU., Which used all its powers to point to the oil-backed currency. US citizens were prohibited from investing in it, and earlier this year, the Treasury Department imposed sanctions on a Russian bank, which was the main international institution that financed the launch of the petro.
What can really happen is yet to be seen, Venezuela as a sovereign country has all the chance to win in this project, time will tell.
Washington must lead the international cryptography race
All these new cryptographic developments are not taken lightly in the US. UU., That they know the power that can lose if they really are fulfilled. Just a few days ago, the Foundation for the Defense of Democracies (FDD), a group of right-wing experts based in Washington, DC, has published a report that warns US politicians about this threat.
The FDD document details that Russia, Iran and Venezuela have initiated experiments that their leaders admit are tools to compensate for the coercive financial power of the United States. He says that the petro serves as a case study for other regimes to learn what not to do and that Russia and Iran are strong allies in a plan to develop a digital currency that could be used for trade outside of the SWIFT financial messaging system.
This is one of the most important and liberating use cases
The report also focuses on the main rival of the US trade war, China. He explains that the country distrusts the ever-present threat of sanctions against its officials. While China is less threatened by sanctions than other adversaries at the moment, the FDD points out that shifting US influence in the global financial system is a Chinese national priority. He warns that the Chinese commitment may be the biggest variable in efforts to resist sanctions. “China’s participation, if it involves moving its trade to a blockchain platform outside the conventional system, would be a game changer,” which could change the entire financial system based on the dollar.
The think tank finds that technology has created a potential path towards alternative financial value transfer systems beyond the control of the US. UU “Washington, therefore, must understand the benefits and threats posed by new financial technologies, maintain the integrity of global finance and cultivate the experience and influence to lead in what is becoming an international cryptography race.”
This may help explain the recent interest of the Trump Administration in cryptocurrency
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