Iran Makes First Multi-Million Dollar Imports Using Cryptocurrency
Iran has imported goods worth US$10 million using payments in cryptocurrency for the first time. Alireza Peymanpak, the Iranian Deputy Minister of Industry, Mine and Trade and Head of Trade Promotion Organization of Iran (TPOI) made the claim yesterday, stating the operations were carried out earlier this week.
According to Peymanpask, the use of cryptocurrency and ‘smart contracts’ will become common in Iran’s foreign trade with other countries from September. He did not disclose which cryptocurrency was used in Iran’s imports. In May 2022, Director General of the Central Bank of Iran (CBI), Ali Salehabadi stated that in the coming months, the CBI will begin the use of Iran’s national cryptocurrency, the gold-backed Covenant, in operational tests. The government amended the country’s digital assets laws two years ago to allow locally mined crypto for imports payments.
The service used could have been Binance, after several Iranians have previously stated they use the site after the United States reimposed Iran sanctions, with attractiveness over Binance’s perceived weak background checks, and deep liquidity.
Like Russia, Iran is heavily sanctioned, however local traders are getting around being cut off from the global SWIFT banking network by using crypto. This week’s transaction, however, was the first time the Government has used cryptocurrencies in trade.
Stability and trust in cryptocurrencies are slowing gaining acceptance among global traders, and especially now that Russia, a market whose foreign trade last year amounted to US$785 billion has been forced to find alternative solutions to import and receive income for exports. That is has done so is apparent when looking at last month’s trade with China, which recorded a 30% increase over 2021 despite being barred from SWIFT.
The experience of both Russia and Iran in the next few months will lay down the groundwork for how cryptocurrencies will operate effectively and successfully into what will be, by the end of the decade, a revolution in global trade based upon fintech solutions. SWIFT by then will essentially become redundant.
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Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The firm assists British and Foreign Investment into Asia and has 28 offices throughout China, India, the ASEAN nations and Russia. For strategic and business intelligence concerning China’s Belt & Road Initiative please email silkroad@dezshira.com or visit us at www.dezshira.com
