U.S. Lawmaker Introduces Bill Seeking Sanctions Against Iran’s National Cryptocurrency
Lawmakers in the United States have introduced a bill that seeks to impose additional sanctions on Iranian financial institutions as well as on the country’s development and subsequent use of a national digital currency.
As per the U.S. Congress’ website, Rep. Mike Gallager and others introduced the bill, HR 7321, in the House of Representatives on December 17, 2018.
The “Blocking Iran Illicit Finance Act” is meant to help stem any potential cases of money laundering and terrorism financing.
The bill was referred to various House committees among them the Committee on Foreign Affairs, Financial Services, the Judiciary, and Oversight and Government Reform.
As part of the Act, the lawmakers want sanctions imposed on Iran’s financial sector, including its pursuit of a national cryptocurrency and for the Senate or House of Representatives to enact laws prohibiting any transactions or other related activities regarding the Iranian digital currency.
The bill also seeks that sanctions be leveled against any foreign individual that engages in the use of the crypto, be it through selling, supply, holding or transferring the crypto.
Further sections of the act need Congress to get a report on how far the Iranian government has reached in its efforts to develop the national cryptocurrency.
A similar bill to the HR 7321 was also introduced in the U.S. Senate on December 13, 2018, by Ted Cruz, who at one time vied for nomination as a presidential contender.
United States’ sanctions against Iran were introduced in 2005, following Tehran’s nuclear program.
The two houses, the Senate and House of Representatives, then passed the “Comprehensive Iran Sanctions, Accountability, and Divestment Act” in 2010, with the resultant effect of the sanctions being felt by Iran’s financial sector.
In 2015, the U.S. government lifted the sanctions after Tehran agreed to align its nuclear program to the International Atomic Energy Agency standards. That deal, under the Joint Comprehensive Plan of Action (JCPOA), was brokered by former President Barack Obama’s government.
However, that changed dramatically in May 2018, when U.S. President Donald Trump made it known that the U.S. was withdrawing from the JCPOA deal.
In the aftermath of the reintroduction of the sanctions, many Iranians have increasingly turned to cryptocurrency. The Iranian government also began looking at the use of crypto as a way to skirt the sanctions, with the country’s central bank set to roll out a fiat-backed digital currency.
In May last year, Iran’s Parliamentary Commission for Economic Affairs chief Mohammad Reza Pourebrahimi gave the clearest indication of the country’s intentions when he said that crypto gave Iran a way out of U.S. dollar transactions.
He also said that cryptocurrencies could replace the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. Iran’s central bank was disallowed from the group in November.
Despite the sanctions and the cryptocurrency price crash of 2018, Iran has emerged as a destination for cryptocurrency miners keen to tap into its cheap electricity.
In December, U.S. based think tank Atlantic Council reported that an increasing number of Iranians were turning to bitcoin mining and that many were recording profitability.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.