Following recent announcements that Iran is in the final stages of launching a national crypto-money pilot, Iran’s IT Minister Mohammad Javad Azari Jahromi has provided slightly more detail in an interview with local media.
In reference to suggestions that Iran is developing cryptocurrencies as a means to circumvent financial sanctions, Jahromi said:
“All cryptocurrencies are capable of circumventing sanctions because they are not under supervision of the US financial regulatory body, and the national digital currencies are naturally capable of this.”
The minister further said the Iranian cryptocurrency will be backed by assets, thus will be fully compliant with sharia law:
“The Iranian cryptocurrency will be backed by assets, just like the Malaysian cryptocurrency which is backed by gold and the Venezuelan one which is supported by oil,” Jahromi said.
The minister further said that the recent Central Bank ban of cryptos does not apply to the national cryptocurrency and “does not mean Iran will resist against cryptocurrencies.” He said:
“The CBI ban on Bitcoin dealings was made out of concerns such as [it could lead to] foreign currency flight and that the [volatility in the crypto market] could lead people to lose their assets. But Bitcoin is not the one and only cryptocurrency.”
Iran has recently seen a plunge in the value of its fiat money following some dicy geopolitical tensions with President Trump. This project, however, has been in development for some time as we reported back in February, around the same time as the Venezuelan Petro ICO.
Details remain very sparse, but if it is in the same style as Venezuela, then it might more correctly be called a tokenized bond which can then also act as money.
While the Malaysian crypto seems to refer to what appears to be a private project that tokenizes gold Digix style.
The minister did not say, or the local media reporters did not clarify, what asset it would be backed by, although it would not be a hard guess to think it will be oil, but we do not know.
If this is Venezuela style then presumably at some point the “whitepaper” will be “leaked” or published, with the technical details in that case pretty trivial and not very interesting, while the financial aspects, such as how they would maintain the asset backing, as well as how much they’re looking to raise and all the rest, might interest some.
America, of course, would probably declare it illegal for US investors and subject to sanctions, as they did with Venezuela’s Petro, but that did not prevent the latter from raising billions.
If this is not Venezuelan style, then the geopolitical, and wider, angle is far less interesting as it would all probably be more of an academic exercise at least for the near future, but if it is tokenized bonds, then we are truly in a new era.
And in that era America will have to decide whether they run fast and focus on winning, or whether they try whack a mole and focus on winners.