Rial’s Sharp Drop Over Weekend Boosts Demand for Bitcoin in Iran

The rial traded at historic lows this weekend in Iranian black markets as financial problems made worse by US sanctions continue to take a toll on the country.

According to the Arab Times, Iran’s national currency traded at 116 000-to one US dollar Saturday before briefly trading at 122 000 on Monday, July 30th.

The Iranian central bank blamed the recent drop on “the enemies’ conspiracies,” although Iranian media outside the country have repeatedly accused the Iranian regime of badly mismanaging the economy.

The rial’s persistent instability and reported shortages of foreign currencies like the US dollar within Iran are said to be driving a demand for Bitcoin, a digital currency that circulates on the Internet.

A chart at Coin Dance shows that Bitcoins purchased from LocalBitcoins Iran were selling at close to 20 million rials, around $20 000 dollars US, yesterday July 30th.

[clickToTweet tweet=”The rial’s persistent instability and reported shortages of foreign currencies like the US dollar within Iran are said to be driving a demand for #Bitcoin, a digital currency that circulates on the Internet” quote=”The rial’s persistent instability and reported shortages of foreign currencies like the US dollar within Iran are said to be driving a demand for #Bitcoin, a digital currency that circulates on the Internet”]

One Bitcoin was selling in the US at yesterday for around $8150.

LocalBitcoins is a service that connects bitcoin buyers and sellers and holds payments in escrow until sellers provide proof they’ve sent coins.

The rial has lost about half its value since President Donald Trump canceled the Iran nuclear deal in May. According to Arab Times, the Trump administration has since ordered US allies to stop importing oil from Iran by November 4th or face consequences.

American financial institutions are also obliged to cease doing business with firms they know are cooperating financially with Iranian firms.

According to PressTV, the only legal independent broadcaster in Iran, Iranian Parliamentary Chairperson of the Economic Commission, Mohammad Reza Pourebrahimi, traveled to Moscow in May and met with Dmitry Mezentsev, the Chair of the Russian Federation Council Committee on Economic Policy.

The two reportedly met to discuss how, “digital currencies could provide a way for both Iran and Russia to avoid US dollar transactions, as well as a possible replacement of the SWIFT interbank payment system.”

According to the Iranian Republic News Agency, Pourebrahim was quite pleased with the meeting, and believed that, “Iran and Russia are operationalizing digital currency to bypass sanctions.”

Although Russian officials have publicly nixed the idea of a “crypto-ruble” emerging any time soon, Russia is said to have also encouraged Venezuela to develop a national cryptocurrency, El Petro, as an experimental way to evade sanctions.

Venezuelan President Nicolas Maduro launched El Petro in February and claimed to have sold $735 million dollars of it in a presale, according to Reuters.

Venezuelan ministers travelled to India and Qatar attempting to generate deals using the currency.

Venezuala reportedly offered India a 30% discount on Venezuelan oil imports if India paid using El Petro. India declined.

As shared by CCN, El Petro was initially sold for $60 US, but now trades at $16.50 on exchanges.

 

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