Iran Sees No Bitcoin Premium Even as Tensions Escalate – Trustnodes

Iran Sees No Bitcoin Premium Even as Tensions Escalate


Tensions have escalated in Iran following the shooting of a drone which Iran says had enter their airspace while US says it had not.

At least thankfully no one died as far as we are aware and at least both agree Iran did shoot a drone. With the question being whether this all is Trump’s strategy of asking for half the price so as to get 30% off, or Bolton’s strategy of just bomb everyone.

You’d think the former, just as you’d think amid tensions bitcoin would develop a considerable premium.

However on Exir, a crypto exchanges based in Iran, no such premium can be seen.

Iran crypto prices, June 2019
Iran crypto prices, June 2019

That says USD, but it’s a mistranslation for TMN, which stands for tomans. Likewise it should say BCH and Ethereum.

All three are currently trading at around global prices. That’s if you don’t use the official exchange rate, in which case all three would have a mindboggling premium.

The Confusing Iranian Money

With two currency denominations and two exchange rates, navigating just what is the price of anything in Iran can be confusing.

First of all, their money is called Iranian Rial, trading under the ticker of IRR. Well, was trading. It does not appear to be trading any longer.

Iranian Rial, which is what Google uses for conversion, stopped trading at 42,000 IRR to the dollar. That’s the official rate, putting bitcoin at $30,000.

The problem is no one has access to this exchange rate, except perhaps government officials, and no one even uses IRR.

What they use now is Tomans. These are basically IRR, but with a zero nocked off and with apparently their own ticker of TMN at least on Exir.

The free market rate of one TMN to the dollar is 13,350. One bitcoin is trading at 123,500,000 TMN, or about $9,300. Roughly the same as in other global exchanges.

Trading volumes on this exchange appear to be very low too, just $50,000 for bitcoin in the past 24 hours.

That’s for a country with the GDP of $440 billion, but their economy is deep in trouble.

Sinking Iran?

On the surface, the Iranian economy is growing at 1.8%, but in reality it is shrinking and considerably for inflation there has reached galloping levels of 52% a year.

Part of that is because Rial’s or Toman’s value against the dollar has dropped like a rock, and part of that may be because they’ve never had low inflation of circa 2% since the late 80s.

Inflation in Iran
Inflation in Iran

The lowest inflation has seen is about 10% for the now past 4 decades in Iran. That suggests there’s some monetary mismanagement going on in the country.

Yet their economy has been doing sort of ok, even growing in real term sometime, but not in the past circa two years.

Iranian GDP growth
Iranian GDP growth

Interest rates there are high and have not been below 10% since data begun in the early 80s. Hence perhaps the monetary mismanagement bit.

Yet bitcoin doesn’t appear to be gaining much traction perhaps because their relative isolation and probable low levels of english education has led to information traveling quite slowly.

Yet that appears to be changing, with some Iranians apparently celebrating pizza day.

There are suggestions the mining industry has been lured presumably with cheap energy, Iran so potentially seeing bitcoin as a way for at least some of its citizens to bypass sanctions.

Apparently even Iranians studying in US can not bring Iranian money with them to pay tuition fees. However, considering there is no premium here or any difference to global bitcoin prices, it does appear bitcoin freely moves.

A Proxy War?

The mess in Arabia and Persia due to arbitrary borders drawn after the first world war with little consideration for family lines and cultures has now led to a proxy war in Yemen and, in light of these tensions, one wonders whether there will be a proxy war in Iran itself where China and Russia would probably get involved with Europe perhaps again bearing the brunt of any refugees and human cost.

Israel doesn’t like Iran, but seems fine with Saudi Arabia. Why? Well, they talk about religion, ethnicity and all the rest, but it’s that old fashioned nationalism or more correctly the king always wanting more and more power for himself and ordering peasants to go and get it.

Modern kings now only rule for 4 or 5 years, which usually translates to 8 or 10 years, and in some cases, like Benjamin Netanyahu, for about 30 years in one form or another since the 90s.

It is quite interesting that the one liberal party in Israel, called Blue and White, is described as having an ideology of national liberalism.

This is a country where they have an ultra-nationalist party, so suggesting everyone is a nationalist, thus they have to add ultra.

As a nation that has been at war for nearly a century, such nationalism and perhaps even ultra nationalism is to be expected.

Yet it is very unfortunate as one would have far preferred peace, if for nothing else then for the sake of all Israeli young men and women who face two years of conscription.

While in Iran they have a religious theocracy, but such term serves only to confuse for Iran too is best described as nationalist, nationalists who thought the oil belongs to them and so took it in the 70s.

Religion and nationalism go hand in hand. Whether such religion is Hindu or Muslim or Christian or whatever else, it is primarily at the service, and it is primarily used, for nationalism and by nationalists.

Just recently Iran deployed “2,000 new ‘morality police’ units to quell hijab rebellion.”

So showing quite clearly politicized religion is more of an enforcement tool to increase divisions and to enforce the will of the king, just as is nationalism.

This all of course was articulated very well in Europe during the enlightenment, but that enlightened pen has gone very silent.

Now that there might be a window for peace, perhaps it should start speaking more loudly and call for liberalism to end all wars in all countries, for only liberalism can defeat nationalism or enforced religion.

And as ironic as it may be, such tool of enlightened intellect that could well serve liberalism might be bitcoin, for it knows no borders, no nationalism, no religion, nor any other division.


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