Iran wants to create an Islamic state cryptocurrency to counter the US dollar

Colin Baseman

Cryptocurrency is one of the most promising sectors of the world market, which in the future can replace centralized payment units and allow creating a transparent payment system. Most developed Western countries are interested in supporting and developing a digital currency, but the creation of a separate Muslim cryptocurrency may mean the beginning of an economic and military confrontation between major powers.

The creation of an Islamic cryptocurrency

Iran, led by President Rouhani, decided to enter the cryptocurrency market by creating its own payment unit. The media notes that the future currency is designed to unite the forces of Islamic States in the fight against American pressure.

Learn more about changes in the cryptocurrency market in the article " Regulation of the cryptocurrency market. Binance commented on blocking the withdrawal of coins to Wasabi Wallet." 

The creation of a new "cryptocurrency" can be a weapon in the fight against Washington's sanctions, experts say. Other experts believe this is a weak attempt to confront Tehran. it is unlikely that digital coins will be able to compete with the US economy. 

Statement by the Iranian President at the summit

Hassan Rouhani, the current President of Iran, made a bold statement at the summit in Malaysia, in which he invited members of the Congress to contribute to the development of a single digital system that will unite the resources of the Muslim powers.

In his speech, the leader called for, "It is time for the Islamic world to resist the influence of the United States and the dominance of the American currency in the economy of developing countries." According to him, its own monetary unit will strengthen the economy of the "third world" and effectively fight the financial regime of America.

The advent of Blockchain technology makes it possible to open your own currency with the support of Central banks.

Experts note the following advantages of blockchain technology:

  • secure data storage;
  • high transaction speed;
  • transparency (open source);
  • decentralization of the database.

In addition to creating a new digital currency, the Iranian leader intends to open an investment Fund in Kuala Lumpur to attract the best IT specialists and conduct scientific experiments in the field of digital technologies.

Also, on Rouhani's initiative, a proposal was put forward to organize a common Islamic fund for mutual support of the development of Muslim countries and financing of technological cooperation.

The proposal to create an Islamic currency was supported by the government of Malaysia, noting that a common virtual payment system will create a financial alternative to the us dollar.  

Other members of the Congress was not as enthusiastic as Rouhani. Turkish leader Erdogan criticized his colleague and said that now is not the time to spend resources on the development of new technologies, it is better to focus on attracting real funds.

Alternative to the US dollar

The President of Iran explicitly stated that the new currency will be "a blow to the financial hegemony of the United States." The Islamic leader considers the economic sanctions imposed by America to be the main tool for suppressing other Nations.

Hassan Rouhani noted that the sanctions imposed against Iran have led to a significant increase in prices for food and gasoline, as well as to mass protests by ordinary citizens. The people of the country, according to him, live on the verge of poverty and a free payment zone without restrictions is required to solve the problem.

According to analysts, Iran's initiative is unlikely to be supported by other States. In the face of increasing conflict with Saudi Arabia, few will dare to enter into an Alliance with Rouhani.

Washington's leadership is constantly imposing new sanctions against Tehran. So, in mid-December, the US imposed restrictions on Iranian judges for corruption and extremism. According to experts, America has imposed more than 90 restrictive measures against Iran's state leaders and systems over the past two years. According to Rouhani, this is the way the US authorities seek capitulation or the collapse of the country.

Mining in Iran

The government of the Republic has been trying to introduce cryptocurrency into circulation for a long time. In July 2019, virtual coin mining was legalized, after which bitcoin mining formed a separate industry in the country. 

To take advantage of the opportunity to engage in mining, residents of Iran must obtain a special permit from the Ministry of trade and industry. Income from an activity is taxed, regardless of the nationality of the person who is engaged in this activity.

In spite of such stringent control, the miners have substantial benefits from the state. For example, when they deduct revenue from sales abroad, they receive a discount when paying for electricity, and can also expect a partial refund of tax payments. After the official permission for mining, the number of crypto farms in the country jumped sharply.

However, it is officially forbidden to use bitcoins as a means of payment in the territory of the Islamic state. The government cited the high risk of money laundering and illegal support for terrorist groups as the reason.

The population actively invests in cryptocurrency, in particular, in bitcoin, in order to save their savings from inflation caused by sanctions. The issue of creating a separate economic system has long been discussed in Iran.

Political analysts and economists note that the main reason for the decision to create a single Islamic digital currency is the tightening of US sanctions that restrict operations using the dollar. Increasing pressure from Washington, according to analysts, can speed up the process of developing an Islamic cryptocurrency.