Many years have passed since the beginning of international sanctions against Iran; From boycotting banking systems to importing goods and selling oil. The natural behavior of economic actors is to turn to businesses that are either not dependent on foreign countries or can somehow get out of the burden of sanctions. Entering the digital currency market is one of these options.
The decentralized nature of digital currencies makes it impossible for any particular individual or group to control or limit it. The primary goal of Bitcoin is to free financial transactions from the pressures and management of centralized systems such as central banks, so that individuals can trade on a peer-to-peer basis.
This feature has made digital currencies a popular and practical technology for circumventing government sanctions. Contrary to what is now being said, the exchange of digital currencies has been a route for “currency” to enter the country. Recent news about central bank restrictions and payment gateways for digital currency exchanges has greatly inflamed the cryptocurrency market environment in the country. The ban on transparent digital currency exchange platforms turns the volume of working capital in this market into a massive amount of stray liquidity. Also, users’ worries about account blocking and the resulting insecurity have various consequences, including the following.
Currency out of the country
Important traders in the Iranian cryptocurrency market do not hold their capital in cash if their exchanges are closed, but their predictable behavior is to enter international markets. The volume of Iran’s digital currency market is currently more than 25,000 billion tomans, equivalent to 690 million dollars. If next year, we consider the amount of oil sales about 438 thousand barrels and the price of oil is about $ 30 per barrel, the total oil revenue of the country will be about four million and 800 thousand dollars.
Loss of access to assets and inability to track it
Another negative effect of the outflow of currency from the country is the disappearance of the possibility of following the fate of this capital. With the presence of this capital in domestic exchange offices and the possibility of monitoring the circulation of this money is an important possibility for economic orientation and use of this capital in the country. But with the transfer of capital to international exchanges, there will be no possibility to monitor it. An outflow equivalent to at least 10% of the country’s oil revenue could have a significant effect on the country’s currency shortage.
Elimination of the possibility of capital circulation in the country
Another opportunity that will be lost with the outflow of digital currency capital from the country is the possibility of circulating this capital in other markets. Parallel markets such as the stock market and gold have always been the choice of other investors in this field. Usually with the fall of the digital currency market in the world, a significant portion of this capital will move to other markets. The inevitable result of this capital turnover in different markets of the country is economic dynamism in each of the markets. Doing digital currency transactions in informal channels This method, due to the impossibility of tracking transactions, increases the possibility of endangering users’ funds and provides the ground for numerous scams.
The impossibility of authentication as well as the anonymity of digital currency activists on the Blockchain network provides an opportunity for profiteers to engage in wider activities in this field.
High volume of liquidity entering the market of goods and services
The definitive result of this is rising inflation in the country. In a situation where the country’s economy has lost its stability due to sanctions and various problems, this amount of liquidity can pave the way for a new problem in the country.
Hasty decisions are not the answer
What happened in the news space of the digital currency market in the country in the past few days was a series of hasty and unprofessional decisions that created many problems for activists in this field. The concerns of the users of the exchange offices about the blockage of assets and the impossibility of withdrawal caused the users to be willing to prevent important factors from this stable outside market, even with a great loss. Lack of sense of economic security is one of sustainable development in the country. The closure of digital currency exchanges in this situation and with sudden and hasty decisions, has an important victim: activists in the field of digital currency.
The undergrounding of activities has been fruitless in the history of Iran’s economy
In our country, although the field of blockchain technologies and cryptocurrencies has not yet reached the required level, but the field of investing in cryptocurrencies has made significant progress. More than 25,000 billion tomans of capital in this market shows that capital flows are entering this field. In such circumstances, it will not be possible to ban activities in this area in practice. Many major countries around the world, including China, the United States and Russia, have failed to do so. Banning activities in the field of cryptocurrencies will cause these activities to go underground.
In an economy with the conditions of Iran’s economy, the undergrounding of an area of several thousand billion tomans will not result in any more damage to the economy and its activists. The cryptocurrency sector will be easily monitored by the current laws of the country by enacting transparent and practical laws, and the emergence of financial crises and security crises resulting from these crises can be prevented.
Let’s not forget what security and economic crises caused by the crisis of financial institutions in the 1980s; The crises that resulted from the non-transparency and corruption of the management system of financial institutions. One and a half million people are currently working in the field of cryptocurrencies in Iran.
Several sites, exchange offices and educational-research centers are also working on various projects related to this field. It can be said that the field of currency cryptocurrency has directly and indirectly created at least three million permanent jobs with suitable conditions. Apart from investors and economic activists, many of the country’s elite forces are active in the fields of programming, marketing and economics.
People in the technical department of active digital currency centers in Iran are often from the group of people who are experts and interested in the latest technologies in the world. The possibility of interacting with global centers of science and economics, as well as hope for a bright future for digital currencies in Iran, has led many of these people to cancel their immigration programs and become active in the country. These conditions have made the digital currency ecosystem one of the richest business ecosystems in Iran. Illegalization of activities in this field will return to the previous conditions and increase the possibility of Iranian migration.
Blocking of Iranian users’ assets
For years, one of the common occurrences in these international exchanges has been the blocking of Iranian assets. Bainance and Bitrex exchanges, as two international giants of digital currencies, have repeatedly destroyed the capital of Iranian users in recent years.
Bitrex also has a history of blocking Iranian users’ accounts for two years. Unfortunately, users who have problems in these exchanges due to sanctions policies are not able to legally review and pursue their complaints, while domestic exchanges will be required by law to respond to possible problems.
Digital currencies cannot be tracked and blocked by any government or institution, and are therefore a very good tool for circumventing international sanctions against Iran. By using digital currencies, any need of the country in various fields can be met with the lowest cost and without legal problems.
One of the major problems in the Iranian economy is the material and spiritual costs of sanctions to meet the country’s basic needs in strategic areas such as food and medicine. These costs will be eliminated with the help of digital currencies, and the corruption centers that have been created in the shadow of sanctions bypassing will be closed. Banning digital currencies deprives the country of this great and accessible opportunity; It should be said that closing the digital currency market in the country helps to sanction the Iranian economy.
No conflict between stock exchanges and bitcoins
Most experts say there are concerns about the potential negative impact of digital currencies on strategic markets such as the stock market. “Georgia market analyst Mohammad Gorji Ara says:
Bitcoin in Iran is not considered a threat to the stock market. The stock market and bitcoin are two financial instruments with different functions, neither of which can ultimately overshadow each other.
The historic stock market crash of 1999, which wiped out the capital of many small investors, has raised concerns, but digital currencies will not only not pose a problem for them, but will also control the excitement of parallel markets such as the stock market.
The reason for the fall of the stock index is not the activity of investors in the digital currency market. Capital market experts say the reason for the decline is trans-economic issues such as political conflicts as well as weak policy-making. The results of scientific research show that “diversifying” the investment portfolio is one of the most effective ways to reduce the risk of operating in capital markets. This has led many investors to look for new markets to invest in, one of which is the digital currency market.
Currency network security
One of the most important reasons for the growing global popularity of digital currencies is the highly sophisticated and reliable technology used to make them. Major exchanges around the world, such as Coin Bass and Bynance, are among the leading companies in the world’s advanced technologies.
The world’s leading scientists are the creators of many of the world’s most popular digital currencies, and the trust of very large companies such as PayPal and Amazon in this technology has led to the increasing improvement of these technologies. As one of the most important high-tech companies in the world, Tesla has recently converted a significant portion of its capital to Bitcoin and is trying to continue this upward trend.
The world’s major industrialized nations, such as China, Japan, South Korea, and the United States, have invested heavily in digital currency-related technologies, and this trend is expected to continue to grow. Iran, as one of the pioneers of advanced technologies in the region, has no choice but to work extensively in this field.