Europe May Tap Cryptocurrencies to Shield Iran Against US Sanctions

EghtesadOnline :The European Union may opt for digital currencies in its dealings with Iran, as it seeks to save the nuclear deal it signed with Iran along with other world powers in 2015 and now in tangible risk after the US move in May to leave the agreement.

News ID: ۷۸۳۳۴۶

21 July 2018

Austrian Ambassador in Tehran Stefan Scholz said in his speech to a large gathering of foreign diplomatic representatives and Iranian business figures late Monday that one of the ways for safeguarding European interests in Iran is to tap the digital payment methods and cryptocurrency channels.

The envoy, however, said the move should come in tandem with observance of anti-money laundering rules, an area in which Iran is making progress after it was given another deadline by the Financial Action Task Force until October to implement the global body’s action plan.

Iranian officials had in the past spoken of the potential of using digital currency as a way to bypass the US financial system and the use of greenback, as Iran remains cut off due to the US primary sanctions, Financial Tribune reported.

Iran has also announced plans to launch a national cryptocurrency project. Information and Communications Technology Minister Mohammad Javad Azari Jahromi said in April the country had successfully developed a pilot project for launching the local cryptocurrency.

The Central Bank of Iran, however, has banned the use of digital currencies by banks and financial institutions due to anti-money laundering concerns.

The head of Austrian mission in Tehran said that with the progress of Iranian banks in AML standards and KYC (know your customer) practices and better understanding of the digital world, there is potential for moving billions of dollars between the two sides.

Iran’s exports to the European Union during the first three months of 2018 stood at more than €2.91 billion, indicating a 5% rise compared with the corresponding period of the year before.

Iran’s imports from the 28 EU member states over the same period decreased by about 6% to stand at €2.38 billion.

In line with the top EU officials’ firm support for the Iran deal–formally known as the Joint Comprehensive Plan of Action– Scholz said EU’s support package for Iran is not in the framework of a static rulebook but rather a dynamic approach that works in response to the ongoing US embargo.

JCPOA saw most international sanctions on Tehran lifted in exchange for strict but temporary restrictions on Iran’s nuclear work.

On Monday, the Wall Street Journal reported that the French, British and German governments are exploring the prospects of activating accounts for the Iranian central bank with their national central banks to open a financial channel with the country.

Stressing that Iran’s continued commitment to JCPOA could serve as a model for the rest of the world, the Austrian diplomat said EU’s support for Iran would also contain support for innovation, competition rules and empowering Iranian consumers as well as producers.

Last week, Washington rebuffed a formal European request for the US to give European companies broad exemptions from sanctions.

Honoring Commitments

The late Monday shindig was organized by Tehran Chamber of Commerce, Industries, Mines and Agriculture, as the country’s largest business group was also attended by Foreign Minister Mohammad Javad Zarif and First Vice President Es’haq Jahangiri.

Zarif said at the meeting that while Iran preserves the right to exit JCPOA after the US “illegal” pullout, the country prefers to do things through legal channels and find solutions by working with partners.

He announced that the country recently filed a lawsuit against the United States to the International Court of Justice, alleging that Washington’s decision to reimpose sanctions after pulling out of JCPOA violates a 1955 treaty between the two countries.

Two other ambassadors who addressed the meeting, namely Rob Macaire and Pang Sen, British and Chinese ambassadors respectively, who voiced their countries’ continued support for JCPOA as well as engagement with Iran.

Macaire said UK’s support for JCPOA would not be mere “rhetoric” but “practical” and that Iran-Britain business relations are continuing despite challenges from US sanctions.

Referring to Iran’s special place in China’s Silk Road initiative, Pang also considered his country among the committed few that have participated in and honored JCPOA.