Prolonged economic sanctions against the Islamic state have forced Iran to start using crypto as a medium of exchange for international trade deals.
Struggling through decades of economic sanctions, Iran has placed its first international import order using $10 million worth of cryptocurrency, according to a senior government trade official.
News that the Islamic republic placed its first import order using crypto was shared by Iran’s Deputy Minister of Industry, Mine & Trade Alireza Peyman-Pak in a Twitter post on Aug. 9.
While the official did not disclose any details about the cryptocurrency used or the imported goods involved, Peyman-Pak said that the $10 million order represents the first of many international trades to be settled with crypto, with plans to ramp this up over the next month, noting:
“By the end of September, the use of cryptocurrencies and smart contracts will be widely used in foreign trade with target countries.”
Iran was, up until February this year, the most sanctioned country in the world. Iran gets most of its imports from China, the United Arab Emirates (UAE), India, and Turkey, according to Trading Economics.
However, Russia now takes the top spot as the most sanctioned nation in the world following its invasion of Ukraine earlier this year.
The Islamic nation has been positioning to embrace cryptocurrencies as early as 2017. In October 2020, it amended previously issued legislation to allow cryptocurrency to be used for funding imports.
In June 2021, the Iranian Trade Ministry issued 30 operating licenses to Irani miners to mine cryptocurrencies, which then must be sold to Iran’s central bank. Iran is now using those mined coins for import payments.
In February, Iran was also looking at a central bank digital currency (CBDC) built on the Hyperledger Fabric protocol as a means to improve its existing financial infrastructure. A pilot version of a CBDC named “crypto-rial” was reportedly launched in July, and only the Central Bank of Iran (CBI) can mint the CBDC tokens and have full discretion over the maximum token supply.