A high ranking military general told Channel 2 News that Iran might turn to cryptocurrencies to relieve financial pressure from sanctions. As MEHR News Agency reports, Brigadier General Gholamreza Jalali told the state broadcaster that: “cryptocurrencies are untraceable in the financial and monetary system of each country, but internationally they can provide us with great opportunities.”

Debilitating threat of sanctions

Jalali is the head of Iran’s Passive Defense Organization which protects high ranking officials. The outfit also protects important state property that is crucial to the country’s economy. The general was speaking about the threats that Iran faces as a country, ranging from natural to man-made. In that sense, he noted that the country faces greater threat from man-made sources than natural forces.

In particular, the international sanctions are a more debilitating threat than any other. The United States and her allies are able to inflict the sanctions because they control the international flow of money. Many international transactions get settled through SWIFT, a system that relies on the US dollars. In that light, Iran might turn to cryptocurrencies to circumvent the sanctions, because they do not rely on the SWIFT system.

In April, Iran announced that it had developed an experimental local cryptocurrency. Interestingly, the country’s central bank had just imposed a blanket ban on trades in digital currencies including Bitcoin. The ban was out of the usual concerns cited elsewhere across the globe. Most central banks believe that cryptocurrencies could provide a conduit for movement of “dirty” money.

Later in July, government sources revealed that Iran was going ahead with the launching of a national cryptocurrency. The country fired the long serving central bank governor in the same month, Fortune reported. A government official told the country’s media that the currency would “facilitate the transfer of money anywhere in the world. Besides, it can help us at the time of sanctions.”

It appears the government will fall to the digital currency for important imports as sanctions tighten. Iran follows Venezuela in leaning on the digital currency to bring life back into their embattled economies. Venezuela launched the Petro which is a stablecoin corresponding to the price of oil.