Early this year Iran announced plans to develop a national cryptocurrency that would be used alongside the rial, the nation’s fiat currency. Several months later and the state acted on the announcement and has completed the development of a yet-to-be named cryptocurrency that is backed by rial.
Skirting sanctions
Iran’s decision to come up with a national cryptocurrency was informed by the need to evade punitive economic sanctions imposed on it by the US. Iran joins the ranks of Venezuela and the Republic of Marshal Island, the rogue nations under US sanctions focusing on cryptocurrencies in order to evade sanctions.
Rogue Nations
Venezuela has already launched its cryptocurrency, the Petro, supposedly backed by the nation’s oils reserves. The controversial token has been banned in the US as part of President Donald Trump’s strategy to frustrate the government’s efforts at avoiding sanctions. Venezuela has now resorted to convincing OPEC to adopt the token as the official digital asset for the organization. That’s probably quite a longshot. There is something of a less-than-zero chance of that happening.
Contrary to the hype around the Petro before launch, the token has failed to impress and it is unclear if the effort to try to push the purchase of the coin before the end of 2018 will pay off.
Marshall Island on its side has announced that it will go ahead to launch its cryptocurrency Sovereign (SOV) despite warnings by the International Monetary Fund and the US government. The plans to proceed with the development of the national crypto has strained the president’s relationship with the country’s predecessor and a section of the senate with the latter sponsoring a motion of no confidence on the president.
Marshall Island’s government through an intermediary company will issue a maximum of 24 million SOV units to avoid inflation and stabilize the coin’s value. According to current trends, it is increasingly becoming a norm for nations slapped with economic sanctions to develop state-backed cryptos to solve their woes. Be that as it may, it is still unclear if this unorthodox solution will work, or maybe when cleverly executed it might bear results.