The United States Challenges Iran’s Plans to Develop Sovereign Cryptocurrency

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According to reports, the United States is taking a stronger stance towards the planned sovereign digital asset development by Iran. The US is believed to be against the Islamic nation’s initiative citing that allowing Iran to enter the crypto space will give them an escape route from sanctions. From the report, it seems the United States regulators and the federal government are holding against Iran’s plans to create its own sovereign digital asset.

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The Blocking Iran Illicit Finance Act

It was reported back in December 2018 that Congress had introduced a bill known as the “Blocking Iran Illicit Finance Act.” The bill threatens Iran with additional sanctions in response to financial activity that could see it develop its own sovereign cryptocurrency. The United States is concerned that the creation of such cryptocurrency could allow the Islamic nation to launder money, thus dodging the U.S. sanctions.

Another bill relating to the issue sponsored by Ted Cruz (known as R-TX) calls for the addition of sanctions against any entity or person aiding Iran in the development of such a digital currency. This also includes sanctions against any foreign entity or person that may facilitate transactions with the Islamic nation for both the “sale, and supply, or the transfer” of such a cryptocurrency.

Tension Have Risen Between the Two Countries for Many Years

It is no secret to the international community that tension between Iran and the United States have been high in recent years particularly after the Trump administration opted to withdraw from the existing JCPOA (Joint Comprehensive Plan of Action) initiative in May 2018. According to the terms of the accord, Iran had agreed to limit its engagement in nuclear activity, and also give international actors the opportunity to inspect any nuclear facilities in the country. Then the economic sanctions on the nation would be lifted in return.

Laying the Foundation for Sovereign Digital Asset

Meanwhile, Iran has been laying the groundwork to develop its official national digital currency. According to CoinDesk, the Islamic country has recently been in the news, promising that the Blockchain technology will give Iran a huge economic boost. We can recall back in July that it was reported that Iran was looking to issue a sovereign digital asset. A few months later the country agreed to recognize its crypto mining industry officially.

There is a precedent for any country developing its sovereign digital currency with the wrong intentions. Venezuela’s controversial “petro” which is an oil- and government-backed cryptocurrency facilitated by Nicolas Maduro the country’s president is designed to give the South American state a way out of its crippling economy.

So far, Venezuela is yet to see any key benefits from the petro crypto since it was launched. The United States under the Trump administration planned sanctions against Venezuela back in March as well concerning including any trade of petro.

Whether Iran is going to comply with the demands of Congress’ if the bill passes and cease issuing its own sovereign digital currency remains unlikely. However, it can have a negative impact on what can be described as poor relations already existing between both countries.

Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she's not writing, she spends time with her adorable cat, Ginger and works out often.


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