US Lawmakers Impose Sanctions Against Iran’s Cryptocurrency

This week, a bill introduced in Congress by United States authorities in order to have a strict stand over Iran’s efforts to develop its own cryptocurrency.

The bill introduced by Rep. Mike Gallagher includes the ‘Blocking Iran Illicit Finance Act’ which calls for sanctions against the Iranian financial sector along with those who knowingly provide Iran with funding, services or “technological support, used in connection with the development of Iranian digital currency.” The bill was introduced with an intention to combat money laundering and terrorism-related activities.

Moreover, U.S. regulators have claimed in recent months that Iran’s government wants to deploy a sovereign cryptocurrency, similar to the Petro in Venezuela, to escape economic sanctions.

The act particularly disallows transactions, financing or other dealings related to an Iranian digital currency. And also it would introduce prohibitions on foreign individuals engaged in the sale, supply, holding or transfer of the digital currency. With that, the act also demands a report to Congress regarding the government of Iran’s progress in developing a sovereign digital currency. A similar bill was introduced in the Senate by Sen, Ted Cruz (R-Texas).

Previously The U.S. government imposed sanctions against Iran over its nuclear program in 2005. Also, the recent bill comes in the context of the Trump administration’s decision in May 2018 to withdraw from the Iran nuclear deal or Joint Comprehensive Plan of Action (JCPOA).

On JCPOA, Gallagher stated, “Withdrawing from the JCPOA was only the first step in ratcheting up pressure on the Iranian regime.” He added, “We now have an important window to impose maximum economic pressure and degrade the Iranian regime’s ability to export violence across the region. This legislation does exactly that by effectively cutting Iran off from the international financial community.”

Iranians have started adopting cryptocurrency to evade sanctions. Mohammad Reza Pourebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs considered digital assets as a reliable way for Iran to avoid U.S. dollar transactions. Also, they are turning to Bitcoin (BTC) mining because of economic difficulties. However, with mining Iranians are managing to make the profit, despite bearish and fluctuating market.