Amidst shortages of foreign currency in Iran, the country is looking to alternatives, including cryptocurrencies, to support its economy. Reports suggest that Iran is teaming up with Russia to launch a new stablecoin backed by gold for cross border transactions. However, it may work in Russia, but not necessarily in Iran, as the value of gold is less than that of the dollar in Iran, making implementation challenging, says cryptocurrency payments platform, iTeller Dubai. Furthermore, trade between the two countries has increased only marginally; prompting analysts to suggest that economic structures and financial and transport difficulties are at play.
Iran’s largest oil trade was with China in 2020 representing 75% of Iran’s total exports, according to the Atlas of Economic Complexity. As the US nominally reduces its imports of oil from Iran, it is unclear how China will respond to growing pressure. Meanwhile, the US is scrutinizing Iraq’s central bank for potentially channelling dollars to Iran.
The rial’s decline against the dollar has been ongoing since the death of 22-year-old Mahsa Amini on September 16 sparked nationwide protests. In December, Central Bank of Iran Ali Saleh-Abadi was replaced with Mohammad-Reza Farzin to address the currency crisis. Analysts suggest that political instability is the cause of exchange rate fluctuations, as pressure has increased on Iran over its crackdown on anti-government protesters.
عبدالرحمان زمین پیما
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آرمان جعفری
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