Iran Considers Using Cryptocurrency Mining to Fund Car Imports

Iran wants to use its own cryptocurrency to finance imports, given the economic crisis it suffers.

Iran is experiencing an economic downturn as a result of US sanctions, which worsened with the corona pandemic.

Gholam Hossein Mozaffari, CEO of the Free Zone Organisation in Kish, has said that he hopes to reach an agreement with the Central Bank of Iran to finance imports from abroad via Iranian cryptocurrency.

Will cryptocurrencies solve Iran’s crisis?

The Iranian Central Bank informed the organisation of its inability to finance imports due to currency inflation and the current economic conditions.

“Our next proposal will be to provide the required amounts through the digital currency produced in the free zone,” said Mozaffari.

He pointed out that the origin of that currency and its value are known internally in Iran.

Mozaffari stressed that its use will not represent any pressure on the country’s fiat currency.

According to reports, inflation in Iran has reached 30% during the current year 2020.

Iran suffers from the impact of US sanctions, rampant corruption, and mismanagement of the economy.

National plan

Mozaffari confirmed that the island of Kish is currently a hub for mining cryptocurrencies.

Meanwhile, Mozaffari is looking forward to meeting with the governor of the Central Bank of Iran. He hopes to discuss the possibility of using cryptocurrencies to finance car imports.

Mozaffari stressed the need for the private sector to play its role in this regard by launching a cryptocurrency exchange.

“If the central bank allows this, it will be possible to import cars via cryptocurrencies in the free zones, and thus the auto crisis will have been resolved,” he added.

The Iranian government has moved to allow the mining of cryptocurrencies, under restrictions, to obtain the required foreign currency.

Last May, Iranian President Hassan Rouhani ordered the government to establish a national approach to creating cryptocurrencies in Iran.

US President Donald Trump has raised concerns that the Iranians are using digital assets to circumvent the sanctions.

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Mohamed Tharwat 16 Articles
Cairo-based journalist, specialized in economics and finance markets