Iran Looks To Bitcoin As Rial Tumbles

Authored by Michael Kern via SafeHaven.com,

Amid sanctions fears, Iranians have reportedly spent over $2.5 billion on cryptocurrencies to get their cash out of the country in a new form of digital capital flight.

The Iranian version aired on state-run media was buried at the bottom on a long discourse on cryptocurrencies, and downplayed as to its significance, but it comes as the Iranian rial plunges to new lows against the U.S. dollar, the climax of which has been Trump’s formal announcement of a withdrawal from the nuclear deal.

"No virtual national currency has been designed in the country at the present and based on the existing data few people in Iran are cryptocurrencies' customer and more than 2.5 billion dollars has been sent out of the country for buying digital currencies, added point most of the digital currency activists enter this arena because of the huge benefits and speculation" Chairman of the Economic Commission of the Parliament Mohammad Reza Pourebrahimi said.

Shortly after Trump’s announcement last week, the rial nose-dived to 85,000 to 1 US dollar, down from 57,500 rials to 1 US dollar at the end of April, and 42,890 at the end of last year.

Since April, Iran has been attempting to get in front of a sell-off, first unifying official and free-market exchange rates and freezing the rate at 42,000, while banning all other trading in the currency, under threat of arrest.

The rial is expected to dive further on news Tuesday that the U.S. has sanctioned Iran’s central bank head.

Late last week, the U.S. levied sanctions on a financing network, accusing the Iranian central bank of helping funnel U.S. dollars to its Quds Force elite military unit, which is on a U.S. blacklist.

This was followed by another move on Tuesday that saw terror sanctions slapped on the head of the Iranian central bank, Valiollah Seif, whom Washington has accused of secretly funneling millions of dollars through an Iraqi bank to help Hezbollah. The sanctions also include bank senior official Ali Tarzali. Both have been listed as “specially designated global terrorists”.

At the same time, Iranian government moves to head off a currency crisis could lead to further capital flight via cryptocurrencies.

On Monday, the Central Bank issued a new directive setting stricter limits on the amount of foreign cash travelers can take with them out of the country. Travelers can leave Iran by air now with only $5,980 (5,000 euros, or the equivalent in any foreign currency). The new amount halves the previous amount allowed. Leaving by land, rail or sea has a limit of $2,392 per person.

Also in April, the central bank banned the country’s banks from offering services to cryptocurrency firms or from dealing in cryptocurrencies domestically. This has led to a flourishing business for cross-border crypto deals with Iranian citizens desperate to get their money out.

While the initial justification for the ban was to thwart money-laundering and terrorism financing, the Iranian Financial Tribune quoted an Iranian official as saying that the move was intended to stop capital flight.

“The ban on trade of cryptocurrencies such as Bitcoin by CBI, as the financial and currency regulator of the country, is to prevent the flight of foreign currency under the current circumstances of the country.”

Now that the original ban has backfired and possibly led to increased capital flight, the government seems to be wavering, suggesting that the policy might not be set in stone and a new regulatory framework should be in place by the third quarter of this year.

In the meantime, capital flight will be hard to stop, especially considering that all of the government’s recent actions undo their liberal economic policymaking of the past years.

Comments

Sir Edge 107cicero Wed, 05/16/2018 - 15:15 Permalink

 

Very True... In The Past... But there is no advantage to the USA/Israel/EU (West) to start a war with...

 
North Korea... No.... Since North Korea will flatten Sth Korea which supplies West with millions of tech equipment components

Iran... No... Since Iran can fuck up Strait of Hormuz & cause oil to skyrocket - Iran then wins indirectly not directly... 

China... No way The West destroys its customer base and Treasury Support

Russia... No Way... Hypersonic Missiles take out US A-Carriers... Further escalation is irrational even for West's sociopaths.

Syria... Maybe... Only weak point where West invades and does not destroy any Economic Ties etc. But its very tricky there...

 
So in the past agree... Financial war >>> Shooting War >>> but now things are SO interconnected.

In reply to by 107cicero

Bitchface-KILLAH nmewn Wed, 05/16/2018 - 15:40 Permalink

CIA/NSA didn't have anything to do with Bitcoin's creation dipshits...

Explain to my LOGICALLY why these groups wasted 100 years whacking people and installing puppets all around the globe to establish dollar hegemony...  Only to purposely lose it to Bitcoin which they created... so they might be able to get it back??

MAKES ZERO SENSE.

In reply to by nmewn

DIGrif Bitchface-KILLAH Thu, 05/17/2018 - 01:03 Permalink

Logically...ok.

The jig is near up on the trap we call the Federal Reserve Note....so, if the lemmings are about to catch on, lets build another trap for them to run to. Make them think they are getting away when in fact they are no different than sheep being driven from one pasture to the next.

 

How's that?

In reply to by Bitchface-KILLAH

Jballsquared Ahmeexnal Wed, 05/16/2018 - 16:31 Permalink

It’s interesting how the mentally retarded who predicted bitcoin would go to zero when it was under $1,000 now also believe it was created by the government but still believe it’s going to zero. 

If it works, it’s the joooos behind it. If it goes to zero it was a stupid fad. 

Mentally retarded blueprint for how the world works. 

In reply to by Ahmeexnal

Yellow_Snow Sir Edge Wed, 05/16/2018 - 15:08 Permalink

New USSA financial warfare of labeling people as “specially designated global terrorists” and using nationwide sanctions - which greatly affect ordinary innocent citizens... 

Amerika has used and abused 'sanctions' to the nth degree...

In reply to by Sir Edge

Quinvarius Bitchface-KILLAH Wed, 05/16/2018 - 18:07 Permalink

You sound like a delusional fruitcake.  No country on earth is going to start using bitcoin as their national currency.  For one, it sucks and it is slower than crap.  But the main reason is that coining the money of the realm is the right of the sovereign.  They enforce that right because they use their currency to exert control on all things, as well as fund themselves.

 

In reply to by Bitchface-KILLAH

Scipio Africanuz JibjeResearch Wed, 05/16/2018 - 16:00 Permalink

Wake up folks, the price of bitcoin, is the defacto TRUE price of GOLD! Revalue gold at that indicative price, and your eyes will water! If you have gold, good for you! If you have bitcoin, good for you, but with a caveat, possession is nine tenths of the law!

Go long precious metals, get some reputable crypto, the war against the "Red Serpent", is about to go into overdrive!...

In reply to by JibjeResearch

I am Groot JibjeResearch Wed, 05/16/2018 - 15:09 Permalink

I disagree. Not a smart move considering how volatile crypto currency is. And it probably won't help Iran considering the NSA has their sticky mitts all over crypto too. Cryptos are being hacked and stolen everyday by multiple methods. I thought TOR was the greatest thing since sliced bread until the NSA and FBI started running their own nodes for it.

In reply to by JibjeResearch