DUBAI: Iran made its first official import order using cryptocurrency this week, the semi-official Tasnim agency reported on Tuesday, a move that could enable the Islamic Republic to circumvent U.S. sanctions that have crippled the economy.
The order, worth $10 million, was a first step towards allowing the country to trade through digital assets that bypass the dollar-dominated global financial system and to trade with other countries similarly limited by US sanctions, such as Russia. The agency didn’t specify which cryptocurrency was used in the transaction.
“By the end of September, the use of cryptocurrencies and smart contracts will be widely used in foreign trade with target countries,” an official from the Ministry of Industry, Mine and Trade said on Twitter.
The United States imposes an almost total economic embargo on Iran, including a ban on all imports including those from the country’s oil, banking and shipping sectors.
Tehran is one of the largest economies yet to embrace cryptocurrency technology, born in 2008 as a payments tool aimed at eroding governmental control over finance and economies.
Last year, a study found that 4.5% of all bitcoin mining was taking place in Iran, partly as a result of the country’s cheap electricity. The mining of cryptocurrency could help Iran earn hundreds of millions of dollars that can be used to buy imports and lessen the impact of sanctions.
Cryptocurrencies such as bitcoin are highly volatile, making them impractical for large-scale payments.
The European Union on Monday said it put forward a “final” text to revive the 2015 Iran nuclear deal as four days of indirect talks between U.S. and Iranian officials wrapped up in Vienna.
Under the 2015 agreement, Iran curbed its nuclear programme in return for relief from US, EU and UN sanctions. But former US President Donald Trump reneged on the nuclear deal in 2018 and restored harsh U.S. sanctions, prompting Tehran to start violating the agreement’s nuclear limits about a year later.
Central African Republic (CAR), one of the world’s poorest countries, has also embraced crypto. It became the first African state to make bitcoin legal tender in April, and last month launched its own digital coin.
El Salvador last year also adopted bitcoin as legal tender, though the project has been beset by public scepticism amid tumbling crypto prices.
EU expects decision ‘very quickly’ on Iran deal
In Brussels, the EU said it expects Tehran and Washington to “very quickly” respond to a “final” text aimed at salvaging a 2015 deal meant to curb Iran’s nuclear programme.
“There is no more space for negotiations,” a foreign policy spokesman for the bloc, Peter Stano, told journalists in Brussels.
“We have a final text. So it’s the moment for a decision: yes or no. And we expect all participants to take this decision very quickly.”
EU foreign policy chief Josep Borrell, who served as coordinator for the negotiations, said Monday the text had been submitted for capitals involved to make a political decision on whether to accept it.
Iran has said it is studying the 25-page text.
Britain, China, France, Germany, Iran and Russia, as well as the United States indirectly, resumed talks on the issue last week, after a months-long hiatus.
The EU-coordinated negotiations to revive the JCPOA began in April 2021 before coming to a standstill in March.
The 2015 accord gave Iran sanctions relief in exchange for curbs on its atomic programme to guarantee Tehran could not develop a nuclear weapon - something it has always denied wanting to do.
But the unilateral withdrawal of the United States from the deal under president Donald Trump in 2018 and the reimposition of biting economic sanctions prompted Iran to begin rolling back on its own commitments.
The UN’s atomic watchdog, the International Atomic Energy Agency (IAEA), has found traces of enriched uranium at three undeclared Iranian sites. The agency’s board of governors in June censured Iran for inadequately explaining the discovery.
Iranian sources at the weekend insisted that the IAEA first “completely resolve” that “political” issue to clear the way for the nuclear deal to be restored.
Iran had previously dug in its heels over a demand that its Revolutionary Guards be removed from a US “terrorist” blacklist, but dropped that after Washington refused.