Iran has used cryptocurrency in international transactions for the first time. What does this mean for digital assets?
Iran has carried out its first international transaction using cryptocurrencies to import $10 million worth of goods. The country’s Deputy Minister of Industry, Mines and Trade, Alireza Peyman-Pak, posted the information on his Twitter page. While at first glance this news may seem positive for Bitcoin adoption, it actually has its pitfalls. We tell you more about what’s going on.
Note that the scenario of cryptocurrencies being used for international transactions was previously predicted by former BitMEX cryptocurrency exchange CEO Arthur Hayes. He said in April 2022 that the freezing of billions of dollars in Russian assets could be a cause for concern for other countries that receive sanctions from the US, the EU and other states.
Former BitMEX CEO Arthur Hayes
In this case, the authorities will have a choice: either bet on indivisible and non-transportable gold, whose reserves are unknown to the rest of the world, or start looking into cryptocurrencies, which are already being actively accumulated by global giants. Well that sets the stage for Bitcoin to rise to a million dollars, Hayes believes. You can read more about his point of view in a separate article.
How is cryptocurrency being used around the world?
According to Peyman-Pack, the crypto deal is just the first step towards introducing digital assets into Iran’s international trade. Here is his rejoinder, in which the official shares his view of what is happening.
By the end of September, the use of cryptocurrencies and smart contracts in international trade with target countries will be much wider.
Accordingly, the authorities plan to intensify the use of digital assets. Which means it is likely that such experiences will eventually become an example for other countries that are under US sanctions. This is particularly relevant for the financial sector of certain states.
According to CryptoSlate sources, Iran’s Ministry of Industry and Trade, along with the Central Bank, have agreed to develop a crypto programme. Here is the relevant cue.
We are finalising the working mechanism of the system. This should provide new opportunities for importers and exporters to use cryptocurrencies in their international transactions.
Iran also tops the international sanctions rankings
Iran’s adoption of Bitcoin is unlikely to affect most other states’ views on cryptocurrency and may even shift it in a more negative direction. The fact is that Iran has a rather strained relationship with many developed countries. Recall that Iran was listed by the U.S. State Department as a state sponsor of terrorism back in 1984.
That is, Iran’s active use of crypto with its partners may push the U.S. towards stricter measures to regulate the crypto market. Since much of the cryptosphere’s activity takes place in the United States, local regulators’ bans on the digital asset industry could affect its future development.
On topic: The US government will pay cryptocurrency for information on terrorism and cybercrime.
Even without regulatory intervention, Bitcoin is unlikely to show impressive growth in the foreseeable future – at least that’s the opinion of Galaxy Digital fund CEO Mike Novogratz. In a recent interview, he said that the price of the main cryptocurrency will fluctuate between $20,000 and $30,000 for quite some time.
Will Bitcoin be able to rise above $30,000 during its next spurt? I doubt it, but we’ll see. I think we’ll flounder within those limits for now. I would be even glad if BTC would trade near the $20,000, $22,000 or $30,000 levels for a while longer.
The logic is clear - the longer Bitcoin is near the local low of its price in a given collapse cycle, the more time experienced investors have to buy coins.
Galaxy Digital CEO Mike Novogratz
According to the billionaire, the market lacks the influx of funds from large investors to form a new bull run, CryptoPotato reports. The current situation is allegedly difficult to compare to the “mania” of 2017 or 2021, when some major corporations publicly announced their active involvement in the cryptosphere.
In particular, it was last year that Tesla announced a $1.5 billion investment in BTC. At the same time, the giant got rid of 75 percent of its crypto reserves the day before.
Overall, the scenario predicted by Novogratz is quite positive for long-term investors regardless of their capital. Due to the fact that Bitcoin will fluctuate in a fairly narrow horizontal channel for a long time, they will have more opportunities to accumulate enough BTC volume by the $30,000 level breakout. This is also true for other digital assets.
We think the reputation of Bitcoin and digital assets in general is unlikely to improve given what is happening. However, this will not prevent coins from becoming more popular as a means of payment. And it's important to understand that cryptocurrencies are just a tool, and it's up to everyone to choose how to use them.
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