The Next ‘Venezuela’? Bitcoin Up Over $8,400 in Iran Amid Hyperinflation
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| Featured image courtesy of Shutterstock |
Bitcoin price has risen dramatically in Iran following the
government’s decision to grant legal recognition to the country’s
cryptocurrency mining industry.
Bitcoin Premium Comes to Iran
While Bitcoin $6307.03 -0.04% suffered an almost $1,000 drop in the rest of the world, the top-ranked cryptocurrency was reaching new heights in Iran.
Buoyed by the government’s legalization of cryptocurrency mining activities, the local price of BTC shot up to more than $26,000
on the localbitcoins platform for Iran. This figure amounts to more
than four times than the average spot price around the world.
However,
there are counter reports that the $20,000+ BTC price in Iran is
grossly exaggerated, with the actual value on the street being closer to
$8,400. The confusion lies primarily in the difference between the
official and black market exchange rial/dollar exchange rate.
The
license given to cryptocurrency miners in the country isn’t the only
reason for the massive BTC premium in Iran. There is also the matter of
the rial’s rapid decline. The nation’s economy has been on a downward
spiral, and the situation has become further complicated by the
re-emergence of U.S. economic sanctions.
There are fears that Iran
might even be on a similar trajectory to Venezuela which means severe
hyperinflation. Thus, with BTC looking stable compared to the rial,
Iranians are hedging their savings by exiting to Bitcoin.
But
while many “nocoiners” keep sounding the death knell for Bitcoin, the
situation in Iran is a testament to the potential benefits of a neutral,
borderless cryptocurrency especially in the face of economic
capitulation.
Cryptocurrency in Iran
The BTC boom in Iran is in many ways a realization of a long-foreseen outcome. Earlier in the year, Bitcoinist predicted
that Iran could become the first nation forced to use Bitcoin. At the
time, the U.S. as part of its economic blockade against the country was
attempting to prevent Iran from accessing its foreign accounts.
Earlier in the year, the country’s central bank banned commercial banks from facilitating cryptocurrency transactions. Despite the ban, many Iranians continue to turn to Bitcoin
as a hedge against a collapsing economy. Recently a senior official of
the nation’s apex bank hinted that the ban would soon be reversed.
Iran is also considering plans to launch a national cryptocurrency
just like Venezuela’s petro. As with the Latin American country, Iran
believes such a move will aid the country in being able to circumvent
mounting U.S. economic sanctions. According to recent reports,
high-level talks are currently ongoing in a bid to actualize the plan.
See more at: Morisberacha.com
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