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Iranians Turn to Bitcoin, Despite Launch of Local Cryptocurrency

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The President of the Islamic Republic of Iran, Hassan Rouhani, could be the latest leader to experience what cryptocurrencies can do for a nation and its citizens in times of financial troubles.

The same way digital assets can offer refuge for people in unstable regimes, such as Venezuela, sovereign countries may also be able to elude sanctions implemented by foreign powers, such as the United States. In Venezuela’s case, U.S. President Donald Trump made it crystal clear that the purchasing of “El Petro” was now allowed and U.S. Treasury Secretary Steven Mnuchin holds the power to use any necessary regulations to enforce the order.

Trump’s mandate to leave the Iran nuclear deal came as a shock all through the United States as sanctions could devastate its economy and devalue exports of oil and other goods. In preparation of that situation, Iran began working on a local cryptocurrency in 2017, which has been initiated earlier this month.

Priscilla Moriuchi, the director of strategic threat development at Recorded Future, was quoted as saying in a report on Forbes that she is apprehensive about El Petro’s success among investors and she expects the same for Iran’s experimental cryptocurrency.

“The Petro will struggle to be exchangeable for hard currencies such as the dollar or the euro and this will limit its appeal to investors and users. Iran is likely to experience some of the same hurdles if it decides to create its own oil-backed cryptocurrency,” Moriuchi said.

Iranians, in the meantime, are in a mad rush to buy to Bitcoin in order to safeguard their savings.

More than $2.5 billion has already left Iran after the purchase of virtual currencies, according to Mohammad Reza Pourebrahimi, the chairman of Iran’s economic commission.

The country barred Bitcoin trading last month, but it remains entirely possible to buy cryptocurrencies if users make use of services such as mixers to obscure the origin and destination of their dealings.

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