Page 41 - IRANRptOct22

Iran places first goods import order using cryptocurrency
Iran to trial crypto ATM at Kish Island airport
The CBI is expected to keep the crypto rial pegged at a 1:1 ratio to the IRR. Officials in Tehran have seen the potential of cryptocurrencies in circumventing sanctions, but that will not be the case with the digital rial, as it will only be used inside Iran’s border.
The crypto rial will run on a platform called Borna, developed using Hyperledger Fabric, the open-source enterprise blockchain platform established by US technology giant IBM.
It is a permissioned distributed ledger technology (DLT) platform. That means only the CBI can decide which entities will have access. It also means that the crypto rial cannot be mined like Bitcoin and many other decentralised cryptocurrencies.
Al Jazeera reported that a few select banks will maintain and update the network’s distributed ledger, which keeps an immutable record of all transactions and activities is kept.
Iran placed its first official import order using a cryptocurrency this week, Tasnim News Agency reported on August 9.
Such orders could provide a way for Tehran to dodge US sanctions. The type of cryptocurrency used was not disclosed by officials.
The order, worth $10mn, amounted to an initial foray into a process that enables a country to trade via digital assets that bypass the dollar-dominated global financial system. Trade can be conducted with other countries similarly limited by US sanctions, such as Russia, which has lately replaced Iran as the most sanctioned country in the world.
"By the end of September, the use of cryptocurrencies and smart contracts will be widely used in foreign trade with target countries," an official from the Ministry of Industry, Mines and Trade, Alireza Peymanpak, wrote on Twitter. Last year, a study found that 4.5% of the world’s bitcoin mining was taking place in Iran, partly because of the country's cheap electricity, Reuters noted. Theoretically, the mining of cryptocurrency could pave the way to Iran earning hundreds of millions of dollars that can be utilised to purchase imports and reduce the effect of sanctions. However, Iran has also built up a track record of shutting down power-thirsty crypto mining operations at times when the country’s electricity grid becomes subject to major and recurring outages. Critics also point out that cryptocurrencies such as bitcoin are highly volatile. That makes them impractical when it comes to large-scale payments.
Central African Republic (CAR), one of the world's poorest countries, and El Salvador are among nations to have embraced crypto.
Iranian free trade zone (FTZ) authorities on the Persian Gulf resort island of Kish are expected to install a cryptocurrency ATM for foreigners at the island’s airport, Tehran’s Financial Tribune has reported, citing Way2Pay.ir.
As a country under heavy sanctions, Iran can be a difficult country to visit due to a lack of available ways to exchange money. Under the ATM plan, visitors to Kish will be able to use the facility to change cryptocurrencies into Iranian rial (IRR) cash on-site. Word of the ATM move came ahead of a report that Iran has placed its first official goods import order using a cryptocurrency.
The ATM scheme will trial four cryptocurrencies, namely Bitcoin, Ethereum, Tether and Tron.
The offer is reportedly not, however, being extended to Iranian nationals or Iranians with a second passport.
“We have been holding talks with the Central Bank of Iran and crypto exchanges... ATM devices have been delivered to us and will be installed across the Kish Island Free Trade Zone after regulatory issues are addressed,”
41 IRAN Country Report October 2022 www.intellinews.com