On Jan. 29, the governor of the Central Bank of Iran Valiollah Seif
officially announced during a national television interview that the US dollar
will no longer be used within the country as a response to U.S. President Donald
Trump’s controversial temporary travel ban on certain countries including Iran.
According to the official statement of the Iranian central bank and Seif,
the government intends to terminate the usability of U.S. dollars in Iran and
replace USD with a stable reserve currency that is more frequently used in
foreign trades.
Currently, the central bank of Iran are exploring two options; whether to select
one particular foreign currency such as the euro which is used widely for
foreign trades in Iran or to establish multiple currencies and thus allowing the
Iranian people to select whichever currency they would prefer to use.
One major issue analysts have on the elimination of USD as a legal tender in
Iran is that the USD is the foundation of the oil industry in Iran, which
accounts for approximately $41 bln in revenue. The replacement of USD could lead
to severe complications for local authorities.
Impact on Bitcoin and its demand
The Iranian Bitcoin industry has a relatively shallow Bitcoin exchange market
and infrastructure. BTXCapital, the country’s first Bitcoin exchange which was
launched in August of 2015, entered the Iranian market in hopes to provide a
more reliable and secure alternative to peer-to-peer trading platforms such as
CoinAva and LocalBitcoins.
With a market of over 50 million Internet users, BTXCapital stated that Iran has
a potential to become the next major Bitcoin market in the upcoming years.
Ganesh Jung, CEO of Draglet, the development firm behind a white label Bitcoin
exchange platform used by BTXCapital as its base infrastructure, emphasized the
struggle Iranian people undergo to purchase Bitcoin in the country.
In an interview, Jung stated:
"It's really hard to get hold of Bitcoin in Iran. There were ways to buy Bitcoin
but the process was very difficult and the amounts it was possible to buy were
small. The market is massive. A large population with a high proportion
connected to the internet means there is a lot of completely untapped market
potential. Our platform makes trading really easy. All you need to do is deposit
some local currency and then you can trade."
As seen in India, wherein people began to search for alternative stores of value
or gold-like assets such as Bitcoin amid economic turmoil and financial
disaster, it is likely that the Iranian people will look out for currencies like
Bitcoin that are decentralized and easily transferrable.
(Source: The CoinTelegraph)