The Iranian Central Bank Governor Valiollah Seif’s national television announcement on January 29th effectively rendered the US dollar worthless within the borders of the Middle Eastern oil power.
But while Iran’s crumbling relationship with the United States has already proved to have serious repercussions on the dollar, it could be just the push needed for the Iranian economy to embrace Bitcoin as an alternative replacement.
Iran is determined to keep their assets out of the United States’ reach at all costs following the return of over $100 billion in unfrozen assets, which former US President Barack Obama had shipped to them following the end of sanctions that lasted decades.
The country’s decision to boycott the US dollar came after Trump’s administration issued a travel ban on a number of countries, one of which was Iran.
And as the termination of the US Dollar’s use is still underway, Iran has set its sights on two potential alternatives: a stable reserve currency such as the euro, or to select multiple currencies for their people to choose from depending on their preferences.
Either way, the Iranian central bank’s official statement declared the pending replacement of the USD.
Iran’s Oil Industry is founded on the US Dollar
Even as Iran continues to implement their ban on the US dollar, analysts have warned that terminating the US dollar could have serious implications on their USD-based oil industry, which currently brings in an estimated $41 billion of revenue.
Iran’s Bitcoin Market is Largely Untapped
Iran’s first Bitcoin exchange, BTXCapital, launched in August 2015 with an aim to become a more secure P2P trading alternative to platforms such as LocalBitcoins and CoinAva.
Despite the country’s malnourished Bitcoin exchange market, Iran has an untapped market of 50 million internet users, which, according to BTXCapital, puts them right on the verge of becoming one of the biggest Bitcoin markets in the years to come.
But, according to Draglet CEO Ganesh Jungh, the only obstacle is that most Iranians have to go above and beyond in order to buy Bitcoin locally—a struggle that is undoubtedly the main culprit behind Iran’s shallow Bitcoin culture.
Jung explains in an interview that it is the process of buying Bitcoin that is cumbersome.
Furthermore, only small amounts can be purchased at a time.
The irony in this is that the market for it is large.
The percentage of Iranians who are connected to the internet alone is enough to make it one of the biggest Bitcoin markets in the world.
Draglet is a potential solution to the problem.
The platform allows easy conversion of local currency to Bitcoin via a process that is much easier than the others.
Only a Matter of Time Before Iran Fully Adopts Bitcoin
Iran is most likely to borrow from India’s template in a few short years to come.
Economic mayhem is likely to lead them towards alternative representations of value, such as Bitcoin or gold.
The fact that Bitcoin is also very easily transferrable and beyond the influence of any governmental or non-governmental financial institution is also an enticing prospect for most, and one that will likely tilt the scales in the favor of Bitcoin for use in foreign trade.