Business

Iran Makes First Multi-Million Dollar Imports Using Cryptocurrency

Iran has imported goods worth US$ 10 million using payments in cryptocurrency for the first time. According to Alireza Peymanpak, the Iranian Deputy Minister of Industry, Mine and Trade and Head of Trade Promotion Organization of Iran (TPOI), the use of cryptocurrency and ‘smart contracts’ will become common in Iran’s foreign trade with other countries from September. He did not disclose which cryptocurrency was used in Iran’s imports. In May 2022, Director General of the Central Bank of Iran (CBI), Ali Salehabadi stated that in the coming months, the CBI will begin the use of Iran’s national cryptocurrency, the gold-backed Covenant, in operational tests. The government amended the country’s digital assets laws two years ago to allow locally mined crypto for imports payments. The service used could have been Binance, after several Iranians have previously stated they use the site after the United States reimposed Iran sanctions, with attractiveness over Binance’s perceived weak background checks, and deep liquidity. Like Russia, Iran is heavily sanctioned, however local traders are getting around being cut off from the global SWIFT banking network by using crypto. This week’s transaction, however, was the first time the Government has used cryptocurrencies in trade. Stability and trust in cryptocurrencies are slowly gaining acceptance among global traders, and especially now that Russia, a market whose foreign trade last year amounted to US$ 785 billion has been forced to find alternative solutions to import and receive income for exports. That it has done so is apparent when looking at last month’s trade with China, which recorded a 30% increase over 2021 despite being barred from SWIFT. The experience of both Russia and Iran in the next few months will lay down the groundwork for how cryptocurrencies will operate effectively and successfully into what will be, by the end of the decade, a revolution in global trade based upon fintech solutions.