Friday, February 9, 2018

Move over Venezuela as Iran looking hard at creating their own oil backed cryptocurrency

When Venezuela's President Nicholas Maduro announced a few months ago that his government was going to create a sovereign cryptocurrency that would be backed by the nation's oil, gold, and mineral reserves, most in the financial world didn't take it very seriously, with some even seeing it as a last ditch effort for the 'Bus Driver from Caracas' to hold onto power.

However in a new story out on Feb. 9, the idea of an oil backed cryptocurrency coming from a country with a much more stable financial system could be a very serious proposition.  And this is exactly what is being investigated right now in Iran as the oil producing nation potentially could become the second OPEC country to tokenize their oil industry.

Iran is poised to make an entrance into the global digital financial market by introducing its own cryptocurrency backed by the country’s vast reserves of oil and natural gas.
Sam Barden, head of an international commodity trading and advisory company SBI Markets, postulated that Iran may be seeking to create its very own national cryptocurrency – the so called ‘energy coin’. 
The Iranian Ministry of Information and Communications Technology has also announced that the country intends to create its own cryptocurrency infrastructure as it would be in Tehran’s interest. 
Hoshyar Rostami, an independent Iranian economist and head of the finance department at the Canadian University of Economic Research Finapath, in Iran, told Sputnik Iran however that Tehran is unlikely to launch a digital currency in the near future as there is a number of issues that need to be dealt with first. 
"Just like with physical currency like, for example, the US dollar, there are certain complications involved with s cryptocurrency as well. When you purchase some kind of goods using US dollars, the money itself does not move anywhere – instead, it is SWIFT-codes and SWIFT-messages that move and cause the money to be transferred from one account to another. Also, the sender and the received play an important part in this process. For example, the US dollar is not Iranian currency, so Iran takes part in a US dollar transaction it ends up being subjected to restrictions. And the same may happen when cryptocurrency is used; in fact, things may even get worse," he said. 
According to Rostami, one of the biggest problems that need to be resolved before launching the ‘energy coin’ is the Iranian currency’s non-involvement into the global financial system. 
"Our chief problem is not the creation of this digital cryptocurrency itself. First we need to bring our national currency up to the global standards and to ensure that it is recognized by the international currency system," Rostami explained, adding that creating a new cryptocurrency before accomplishing this task would only create more problems for Iran. - Sputnik News
Ironically, an announcement today from China's Security Regulation Commission could soon eliminate Iran's primary roadblock to an oil backed cryptocurrency as they would not need to rely upon the dollar or on the SWIFT system if they have access to be able to sell oil through China using the Yuan currency.

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